Iron ore futures fall to $80 range affected by supply outlook

Iron ore futures for January delivery in Singapore fell 1.4% to $88.74 a ton in early trading, falling into the trading range of $80, according to Sina News. Last week, Australia, the world's largest producer of iron ore, said the price of iron ore in 2020 would fall to the first line of $60 per ton as a result of the recovery in supply easing the global tightening situation, while reminding investors that the decline will not happen immediately. The Australian government said in its quarterly report that next year's average price is expected to be $63 a tonne as global mine production rebounds after Brazil's supply disruption and Chinese steel production declines. It said that while this was slightly higher than the September forecast, it was 21% lower than this year's average. Iron ore prices have experienced a turbulent year this year, with supply difficulties in Brazil and Australia pushing them up to more than $120 in July, before prices fell back as exports rebounded to around $90 in December. Australia joined others in warning that while the recent rally is not at risk of an immediate collapse, there could be a significant fall back in 2020. The Australian Ministry of industrial innovation and science expects iron ore prices to continue to fall to $60.50/ton by 2021. Its forecast is for spot mines with 62% iron content. Australia's views echo the latest forecasts of major banks. Citigroup expects iron ore to fall in 2020. Morgan Stanley has said that by the beginning of 2020, prices may continue to be high, but as the iron ore tightening eases, prices will fall throughout the year.