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Iron ore rally won’t last: Goldman

Timothy Moore


The spot price of iron ore surged more than 10 per cent this past week, rallying back above $US100 a tonne in Singapore futures trading. Still, Goldman Sachs’ commodities analyst Aurelia Waltham is wary.

In a note, Waltham said efforts by Chinese authorities to bolster the nation’s economy are a key reason for the leap in the price of the steelmaking material, which has also been helped by some inventory building. Restocking ahead of China’s “Golden Week” holiday, from October 1 through October 7, has created a pull on port stocks, Ms Waltham said, which fell by almost 3 million tonnes this week based on a Mysteel survey of 45 ports.

“While we see upside risk to our price forecast from potential additional stimulus announcements, we still expect iron ore prices to fall to $US85 a tonne” in the final three months of 2024, Waltham said.

“Even following the pledge to launch more forceful stimulus measures in [this week’s] Politburo meeting, our China economists continue to see limited upside to their 2024 growth forecast and two-side risks to their 2025 growth forecast.”