Price forecasts, page-3

Kristie Batten Thursday, 13 November 2014 UNLIKE many other economic forecasters, Westpac expects the iron ore price to rise back over the $US100 per tonne mark next year.
The bank has lowered its average 2014 and 2015 iron ore price forecasts from $102/t and $112/t to $99/t and $101/t respectively, but expects an improvement in the price before the end of this year to $80/t.
Westpac expects a quarterly average high of around $110/t in mid-2015. “So why have we not thrown in the towel and forecast even lower iron ore prices?” Westpac economist Justin Smirk said. “For one, low prices are having an impact on the marginal suppliers, particularly in the seaborne trade. And while Chinese ore production is yet to reveal its normal seasonality, it has been in a slight downward trend since March.” Smirk also said the bank believed it was too early to give up on seasonality, with the current dip consistent with cutbacks ahead of extreme winter weather.
The shutdown of steel mills during the APEC summit to improve air quality in the Chinese capital was also another hit to demand. “A similar event during the Beijing Olympics had a meaningful impact on demand,” Smirk said. While Westpac said prices would be anchored to a lower equilibrium, a seasonal correction is possible and would set the basis for a recovery into 2015.