Iron ore: 5 things to look for in 2020 Report

Insight 14 January 2020

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Report summary

As we commence 2020 it’s hard to argue against slower demand growth for iron ore (especially in China) and a decent recovery in seaborne supply. Prices will fall - it’s just a matter of how much and how soon! Our annual average price forecast for 2020 is $80/t. Experience from the last five years shows a typical high/low range of +/- 25% either side of the annual average. Applying this logic to our $80/t price forecast implies a high of ~$100/t and a low of ~$60/t in 2020. But what might provoke prices to hit these extremes? In this note we highlight five points to watch, specific to iron ore, that could have a significant impact on the market this year.

Executive summary
- 1. Vale – giving back (some of) what it took away in 2019
- 2. Chinese iron ore production – how sustainable as prices fall?
- 3. An Indian supply side surprise?
- 4. Premiums and penalties – where next?
- 5. Simandou – will it wont it?