Australia Lowers Iron Ore Price Forecast As China Outlook Softens

AFP

Iron ore is transported at a port in Rizhao, east China’s Shandong province on March 4, 2015. AFP Photo

Sydney (AFP) – Leading global producer Australia on Tuesday lowered its forecast for iron ore prices as Chinese steel production eases, but said export volumes were expected to grow as suppliers ramp up output.

The price was forecast to fall to US$54.40 a tonne for this year and slip to US$52.10 in 2016 as China’s output of steel, of which the commodity is a key ingredient, weakens, Australia’s Department of Industry and Science said in a quarterly report.

“China’s steel production is forecast to contract in 2015 and 2016 as the seaborne supply of iron ore increases,” the report said.

“These factors are forecast to drive the price of iron ore down 38 percent in 2015… and a further 4.2 percent in 2016.”

Australia’s revenue has taken a hit as…