Goldman Says Iron Ore’s Going ‘Back to $35’ as Glut Returns

“We think this market will go back to $35 during the fourth quarter,” analyst Christian Lelong said in an interview. That’s 50 percent below Thursday’s close of $70.46 a dry metric ton, the highest level since January 2015. “Our expectation is the oversupply in the iron ore market will return.”

Iron ore has surged in 2016, in contrast to the previous three years when a slowing Chinese economy hurt steel demand and supplies increased. This year, policy makers in China have added stimulus, presiding over a revival in the property market that’s boosted the outlook for steel consumption and prices. Still, burgeoning output and stalling demand growth may drag prices down once again, according to Lelong.