https://au.finance.yahoo.com/news/citibank-bullish-outlook-iron-o...

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Citibank is bullish on the outlook for iron ore prices - here's why
David Scutt
Business Insider3 May 2019, 8:01 am AEST

• A combination of supply disruptions in Brazil, robust Chinese steel demand and improved profitability levels at Chinese steel mills will keep iron ore prices elevated this year, according to Citibank.
  
  
• It expects the benchmark price will climb to $100 a tonne within the next one to three months. Citi expects the benchmark will average $86 a tonne this year before easing to $70 a tonne in 2020.
  
  
• The benchmark price currently sits at $94.17 a tonne, according to Metal Bulletin.
  

A combination of supply disruptions in Brazil, robust Chinese steel demand and improved profitability levels at Chinese steel mills will keep iron ore prices elevated this year, according to Citibank's Commodity Analyst team.

The bank believes the benchmark price for 62% fines will continue to climb in the months ahead, potentially above the $100 level.

Over the medium-term, Citi says improved profitability at Chinese steel mills and robust demand for steel products within China will keep the benchmark price at elevated levels.

"China steel mill margins are now around $50 a tonne, and with robust demand, we expect iron ore prices to average $86 a tonne this year," it said.

Longer-term, Citi is forecasting the benchmark price will average $70 a tonne next year.

Activity across iron ore spot markets has been quiet this week due to holidays in China and Japan.

On Thursday, prices for 62%, 58% and 65% iron ore fines were steady at $94.17, $80.16 and $109.80 a tonne respectively, according to Metal Bulletin.

Market activity should begin to pickup next week as Chinese markets reopen.