Spot iron ore offers eased marginally as oversupply worries kept prices of the raw material under pressure.
Citigroup slashed its iron ore price estimates for this year through 2018 to as low as $35 a ton, saying supply needs to be reduced amidst declining demand.
Goldman Sachs sees iron ore averaging at $38 a ton in 2016 and $35 in 2017.
"Looking ahead, we believe iron ore prices (will) remain under pressure because of China's reduced steel production, driven by the campaign of overcapacity reduction," said an analyst.
As top iron ore suppliers Australia and Brazil continue to lift production, the seaborne market will remain oversupplied this year.
Citi said roughly 100 million tons of global iron ore supply needs to be cut by next year and another 200 million tons by 2018 to help balance the market, with the largest curtailments expected to come from Australia followed by Brazil.
Spot iron ore lost 40% in 2015, marking its third annual decline. It has already fallen more than 8% this year.
Currently, spot iron ore for immediate delivery to China's Tianjin Port stood at $40 a ton.
Following are spot iron ore offers in international markets:
Grade % Fe |
Origin |
Product |
load port |
destination |
Jan 14, 2016: cfr ($/ton) |
Jan 13, 2016: cfr ($/ton) |
Jan 12, 2016: cfr ($/ton) |
63.5/63 |
India |
Fines |
Vizag |
Qingdao |
40 |
41 |
41 |
62 |
India |
Fines |
FOB Vizag |
|
10 |
11 |
11 |
62 |
Australia |
PB |
Dampier |
Tianjin |
40 |
41 |
41 |
63.5 |
Brazil |
Fines |
Brazil |
China |
42 |
43 |
43 |
Source: Traders and ISMW