Our annual average price forecast for 2018 is $50/t CFR ($48/t in real terms – previously $52/t). Prices need to fall to this level and remain there for up to two years to force out uncompetitive seaborne supply that is excess to requirements. We think 2018 will mark the low point of the cycle for iron ore as stagnant demand coincides with plentiful supply of low cost seaborne material. A more concentrated industry structure will emerge post-2020, coinciding with a return to growth in global hot metal production. Enhanced pricing power of the "majors" and positive "cost push" will lead to a gradual price recovery from 2020. Our base case view is for prices to gravitate towards our long term price forecast of $60/t CFR (real terms) by 2023/24. The interaction between scrap and hot metal in the Chinese steel sector has emerged as a key risk factor for iron ore.