Morgan Stanley Predicts Iron Ore Price Surge in Q3
Positive Outlook for Iron Ore Prices
Analysts at Morgan Stanley are optimistic about the future of iron ore prices, forecasting a return of more sustained upside with a target of $120 per ton in the third quarter.
Price Analysis and Factors Driving Growth
- Advertisement -
Morgan Stanley notes that iron ore prices are currently facing resistance at $100 per ton, a level that has historically seen short-lived movements. However, the firm believes that price risks are now skewed upwards due to improving sentiment on Chinese demand and potential supply disruptions in a balanced market.
Evidence of Strong Demand and Potential Supply Issues
The firm’s iron ore price outlook is supported by data from China showing better-than-expected demand trends, with steel output increasing by 3.6% and property sales showing signs of improvement. Global demand growth is projected to be robust at 1.7%, although supply constraints in countries like India, Australia, and others could lead to slippages.
Factors Contributing to Price Volatility
Morgan Stanley highlights the high operational and capital costs in the iron ore market, including rising ocean freight expenses. The firm expects the market to remain closely balanced throughout the year, leading to sustained price increases in the second half of the year.
Anticipated Market Conditions
