Iron ore price outlook for 2024 as per Morgan Stanley

Morgan Stanley predicts a sustained upside in iron ore prices, targeting $120/t in Q3. The firm’s strategists believe that the resistance level is at $100/t, and as the mood improves on China demand and supply slippages, the price risk is skewed upwards. The strategists also noted that the price has traded on average at a 55% premium to this cost level since 2006.

Global demand for steel is expected to grow by 1.7%, per the World Steel Association. The firm’s iron ore price outlook indicates stronger underlying demand in China, with improved steel output and less negative property sales. However, supply slippages may occur due to production issues in countries like Australia, as well as softer exports from India.

Costs are high, including ocean freight and capex costs, and operating costs are rising. Strategists believe that prices will see sustained upside return by H2 due to a closely balanced market for the full year (-19Mt), with the possibility of further upside surprises on China, and volatility remaining high.

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