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PrintA revival of the steel market will have knock on, positive implications for the price of iron ore.
Credit Suisse gave an upbeat assessment of the steel market, which will have knock on, positive implications for the price of iron ore. However, longer term the outlook is bearish.
Following a three year downturn, the sector looks set to emulate the 2003/4 cycle, where prices spiked sharply, but Credit Suisse added: “Our fear is that, come the next steel destock, iron ore could hit USD 60 per tonne to USD 70 per tonne, likely in 2015. But the upside surprise risk is likely to dominate first, in our view.
It said “We think September could pose a risk for resource and steel equities given seasonality and emerging short-term risk factors, but also that this will give investors an opportunity to buy while, like now, the forward looking macro looks set for a recovery relative to what equities are pricing in.”
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