Australian government forecasting the price of iron ore to remain elevated

Australia’s Department of Industry in its latest assessment of commodity exports, prices.

  • Expects the price of iron ore to remain high for the next two years
  • Also expects Australia to become the world’s largest gold producer
  • Exports of commodities expected to be upwards of 250bn AUD in the year ahead
  • department is effectively predicting a benchmark iron ore price of about $US93 per tonne in mid-2021.
Further:
  • expects continued disruption to Brazil’s ability to supply iron ore
  • ”Significant growth in Brazilian short term supply remains unlikely due to the wider problems of COVID-19 across the Brazilian economy”
  • ”The main risk to prices is thus on the demand side.”
  • The department predicted iron ore would hold around $US100 a tonne “over coming months” and would gradually decline to be closer to $US85 a tonne by June 2021.