Goldman Sachs Expects Iron Ore Prices To Average $95/T In 2025, $90/T In 2026

GOLDMAN SACHS:

* SAYS FORECAST THE SECOND-MONTH SGX IRON ORE CONTRACT TO AVERAGE $95/T IN 2025 AND EXTEND OUR FORECAST TO $90/T 2026.

* SAYS RISING IRON ORE PORT STOCKS AND CNY DEPRECIATION DRIVE OUR FORECAST THAT IRON ORE PRICES FALL TO AN AVERAGE OF $90 PER TONNE IN 2026

* SAYS IMPACTS OF EXPECTED US TARIFFS ON CHINA ACT AS THE BIGGEST DRAG ON OUR 2025 PRICE FORECAST.

* SAYS WE DO NOT EXPECT THE ONGOING STIMULUS PACKAGE TO OFFSET THE NEGATIVE IMPACT OF TARIFFS ON IRON ORE PRICES, MARKING A CHANGE FROM PREVIOUS EASING CYCLES

* SAYS WHILE WE EXPECT CHINESE STEEL DEMAND TO DECLINE OVER THE NEXT TWO YEARS, OUR FORECAST FOR CHINESE IRON ORE CONSUMPTION IS SLIGHTLY MORE POSITIVE AT FLAT YOY IN 2025 AND -1% IN 2026

* SAYS ON THE SUPPLY SIDE, A WAVE OF NEW IRON ORE SUPPLY IS EXPECTED TO HIT THE MARKET OVER THE NEXT TWO YEARS, KEEPING THE IRON ORE MARKET IN SURPLUS, DESPITE DECLINING INDIAN EXPORTS AND CHINESE DOMESTIC SUPPLY IN RESPONSE TO LOWER PRICES

* SAYS FORECASTS INDIAN NET EXPORTS, ESTIMATED AT 32 MILLION TONNES IN 2024, TO FALL TO 14 MILLION TONNES IN 2025 AND 10 MILLION TONNES IN 2026 AS LOWER SEABORNE PRICES PUSH SOME EXPORTERS OUT OF THE MARKET

* SAYS CHINESE DOMESTIC PRODUCTION IS ALSO EXPECTED TO FALL IN RESPONSE TO LOWER CHINESE DOMESTIC DEMAND.

* SAYS FURTHER UPSIDE PRICE RISK EXISTS FROM DELAYS TO EXPECTED SUPPLY ADDITIONS, WHICH COULD KEEP PRICES SUPPORTED IN THE $95-100/T RANGE OVER THE NEXT TWO YEARS IN THE SCENARIO WHERE 50% OF EXPECTED NEW SEABORNE SUPPLY IS DELAYED