“Morgan Stanley’s Predicted Iron Ore Price Outlook for 2024”

“Morgan Stanley released its new iron ore price forecast where the firm’s strategists highlighted they are targeting $120/t in Q3 in an aim for a return of more sustained upside.

Iron-ore is seeing resistance at $100/t, while previous moves have been short-lived relative to costs, and the price is risk-upside skewed as “mood improves on China demand and slippages to supply come amid an already balance market.” “We see little room for a further leg downwards… in fact, since 2016 price has averaged traded at 55% premium to this cost level,” said Thursday the strategists. The strategy’s iron ore price forecast highlighted currently have a data from China suggesting underlying demand is far better than the sentiment implies with CISA’s 10-day average steel output improving 3.6% and property “sequentially less negative” at -19% versus -38% previously.

World Steel Association anticipates a robust global demand growth of 1.7%, while softer Indian exports and production issues from Australia and elsewhere hint supply slippages may materialize. Furthermore, costs are high at every level with ocean freight costs and Capex costs up, while operating costs continue to rise. “Our recent price deck reflects a closely balanced market for the full-year (-19Mt), underpinning our view that prices will see sustained upside return by H2. We especially watch for upside surprises on China that may bring forward timing, and expect volatility to remain high,” the strategists added.”