Experts are predicting a sharp fall in iron ore prices, following the crash in prices for lithium and nickel.
Concerns about falling demand from China, combined with questions over demand for Australia’s largest export and an imminent surge in supply, could result in a price of US$80 per tonne, a fall of over 30% from the current level of over US$120 per tonne.
New supplies from Africa’s Simandou region, and slowing demand from China, suggest that the market could be showing signs of saturation.
Major iron ore companies are already showing some instability due to the 45% fall in the nickel price, with BHP’s share price falling by 13% in 2024, with Rio Tinto 10% lower and Fortescue down 5%.
Markets must avoid complacency, and work to reposition themselves to avoid ‘potential carnage’, say pundits.
There is some cause for optimism, with the Commonwealth Bank believing that there is a realistic prospect of additional stimulus in China, particularly via infrastructure investment.