Don’t bet on a comeback in iron ore

Christian Lelong and Amber Cai, Analysts at Goldman Sachs, maintain their forecasts for iron ore to average $52 per metric tonne this year. “Market fundamentals will reassert themselves sooner rather than later. The structural drivers of the iron ore price trump cyclical drivers and they are unchanged since mid-2014: demand is lacklustre, supply growth continues and prices must overshoot on the downside to force high-cost mines to close.” On the recent rally in prices, Lelong and Cai wrote "The rally is taking place during the early stages of a long bear market that in our view is set to last well into the next decade." (Source: AFR)