Goldman sees 2010/11 iron ore prices rising 10 pct
12/06/2009 1:15:41 PM
SYDNEY, June 12 (Reuters) - Investment bank Goldman SachsJBWere sees contract iron ore prices rebounding 10 percent nextyear and spot prices also firming, as global seaborne tradepicks up and Chinese imports rise.
"After conceding contract price cuts in 2009 ranging from28 percent to 48 percent we believe the balance of pricingpower will shift back in favour of the suppliers in 2010 and wehave raised our benchmark price forecast for Australian ironore fines to (an increase of) 10 percent, it said in a note toclients.
The broker previously expected prices to be unchangedbetween the 2009/10 and 2010/11 shipping years, which end March31.
It also raised its forecast for spot prices over the nextthree to six months to $70-$80 a tonne, delivered in China onthe basis that the seller pays for shipping and the buyer forinsurance. The forecast is also based on 62 percent ironcontent.
Spot prices currently stand at around $$76.50 a tonne.
"We see significant upside risk to this view if non-Chinesesteel production recovers sooner and stronger than we currentlyexpect," it said.
Sources contacted by Reuters on Thursday said Japan'sNippon Steel agreed with BHP Billiton to cut fine iron ore prices by 33 percent,matching a benchmark deal reached with Rio Tinto.
But China, the world's largest steel producer, continues tohold out for a price cut of at least 40 percent, straining thebenchmark pricing mechanism.(Reporting by James Regan; Editing by Mark Bendeich)
