Here is further news on the price of IO in the short term in the financial review. More investors will be looking at VMS who want to be part of the IO train, imo. gla

https://www.a*fr.com/markets/commodities/analysts-scramble-to-keep-up-with-resurgent-iron-ore-20210611-p58071

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Analysts scramble to keep up with resurgent iron ore

WilliamMcInnesReporter

Jun 11, 2021 –1.44pm

Analysts have been forced to rapidly upgrade their forecasts following a surprise resurgence by spot iron ore this month, as China’s jawboning ofcommodity prices fails to keep a lid on the price of Australia’s No. 1export.

Elevated prices will only lend further credence to the expectation that dividend records are set to tumble in the next earnings season as the price of iron ore sits well above consensus with just three weeks of the 2021 financial year remaining, and keeping the S&P/ASX 200 in record territory.

China’s jaw boning has done little to curb soaring steel margins and iron ore prices. Bloomberg

On Friday, Macquarie boosted its June quarter price forecast for the bulk commodity by 39 per cent to $US195 a tonne, driving huge upgrades to earnings for the majors.

“The upgrades to our iron ore price forecasts have transformed the earnings outlook for the producers,” said Macquarie analyst Hayden Bairstow. At spot prices,“material upside to our new upgraded earnings forecasts remains”.

“We continue to favour Rio Tinto over BHP and Fortescue, although the gap has narrowed, with all three stocks trading on similar free cash flow yields forFY22,” the broker said.

The upgrades have fund managers licking their lips, with the major miners ontrack to return record levels of cash to shareholders.

“They’re all over-earning and margins are strong,” agreed Tribeca Global Natural Resources portfolio manager Ben Cleary.

“There's going to be record earnings and margins, and the dividends are going to be very healthy. And there will be even more left over for growth projects.”

Macquarieis forecasting BHP will declare a final dividend of $US2.01, double its interim dividend of $US1.01, while Fortescue Metals Group is expected to declare a final dividend of $1.93, 31 per cent ahead of its interim payout.

Rio Tinto is expected to return $US9.70 a share to shareholders in the 2021 calendar year, 74 per cent ahead of its total payout from a year ago.

“We note that there remains strong earnings upgrade momentum for the iron ore producers despite the material upgrade to our forecasts,” said Mr Bairstow.

The sharp rally in iron ore prices back above $US200 a tonne in the last few sessions has caught many analysts off guard. On Thursday, 62 per cent grade iron ore traded in the spot market rose $US4.17 to $US216.84 a tonne, according to Fastmarkets MB.

Just over two weeks ago, theprice of iron ore dipped below $US200 a tonne after hitting a record high in mid-May, driven by concerns China would intervene to stop speculative behaviour.

But a sharp rebound through the start of the June has forced a rethink of just how effectively China can tamp down soaring prices.

“The jaw boning from China has historically not had much success,” said Mr Cleary.

“All the fundamentals are pretty strong. Steel producer margins are at multi-decade highs and I can’t see demand dissipating anytime soon. We’re at the start of fiscal stimulus, not the end, so I think over the northern hemisphere summer,things should remain quite strong.”

Macquarieis confident the price of iron ore won’t slide heavily anytime soon,forecasting the price of the bulk commodity will consistently remain above$US100 a tonne until 2023.

“A stepchange in Chinese demand, combined with a lack of expansions, largely from themajor producers, is now expected to result in more high-cost supply beingrequired in the medium to long term to balance the iron ore market than we hadpreviously anticipated,” said Mr Bairstow.