A remarkable month for iron ore with prices hitting two year highs at $80/t. The global asset allocation story has played a big part in the latest rally, with iron ore benefiting along with most industrial metals and minerals as money switched out of bonds into commodities, before a sharp reversal of this flow on the final day of the month as investors took profits. Steel specific factors have also been supportive – notably the knock-on effect of high coal/coke costs and Beijing's commitment to steel capacity closures. But the coal/coke "cost-push" story has largely run its course and steel mill margins are under pressure again. This will inevitably feed through to iron ore pricing. Our revised forecast for Q4-16 is $67/t, giving an annual average price of $57/t - marginally above last year's price of $55/t. Not many picked that at the start of the year!
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Commodity market report | Nov 2016
Global iron ore short-term outlook November 2016
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