Goldman Sachs Lowers Iron Ore Price Forecast for Q4 2024

Goldman Sachs has revised its iron ore price forecast for Q4 2024 down to $85 per ton from $100 per ton due to concerns over an oversupply in the global market, aggravated by strong shipments and weakening demand from China.

Analysts warn that unless substantial supply cuts occur, prices will continue to face downward pressure. Recently, the 62% Fe iron ore spot price fell to $90 per ton, a 20% decline since July 2024.

Global iron ore supply remains strong, with shipments 2% higher than the same time last year, creating a surplus in the market. Although India has reduced exports, a significant recovery in demand seems unlikely.

Chinese iron ore consumption shows some stabilization, but overall demand remains low, particularly due to a downgraded GDP growth forecast of 4.7% for 2024, limiting support for iron ore prices. Steel production is also facing risks; while August saw a 21% increase in exports, demand remains uncertain.

Goldman Sachs suggests that to restore market balance, prices may need to drop even more to around $80 per ton, pressuring lower-cost producers to cut output. Despite potential temporary support from restocking before China’s Golden Week holiday, the overall market outlook remains oversaturated.