Australia cuts Iron Ore export forecast for current fiscal; prices to fall

Australia cuts Iron Ore export forecast for current fiscal; prices to fall

SYDNEY (Scrap Monster): The Australian Government’s Bureau of Resources and Energy Economics in the latest commodities forecast paper has cut the country’s iron ore export target for the current fiscal. The Bureau cut the iron ore export outlook by 3%. Further, it predicts the iron ore prices to fall to $103 per ton by next year.

According to the forecast, the iron ore exports by the country during the current fiscal year ending June 30^th may see exports reaching 631 million tons. However, this implies a growth of nearly 20% over the previous year. The government agency in its December outlook had projected iron ore exports at 650 million tons. Also, the average iron ore prices are projected to decline towards $103 per ton from the current year’s $110 per ton.

Although the Bureau did not mention any specific reason for the outlook downgrade, it is widely believed that the bad weather conditions that prevailed in the country during recent months have prompted the revision. Huge cyclones and massive rains had affected the country’s mine production of iron ore.

Meantime, the iron ore mining majors such as Rio Tinto, BHP Billiton and Fortescue Metals have announced increased shipments to China. The global iron ore market face surplus fears as Chinese demand has already started slowing down.