Yesterday's lightning was not restricted to Perth, with direct hits on WA's embattled iron ore sector as more analysts predicted doom and gloom for the State's most important commodity.
In a research note released this morning, Citi said it expected the iron ore price to fall into the $50-a-tonne mark.
"We have downgraded our price forecasts and now expect prices to average $74 in Q1, moving down to an average of $60 in (the 3rd quarter of 2015) – briefly dipping into the $50s – with annual averages of $65 in 2015 and 2016," the investment bank said in a note sent to clients.
Citi said it expected steel demand to fall back further during the first quarter of next year, pyushign the price.
It comes as ANZ's research team returned from a trip to China to declare "the party's over for iron ore" after discovering demand conditions that were more challenging than thought, while analysts at RBC Capital Markets slashed their price forecasts for this and next year and predicted small WA's iron ore miners would be loss-making.
Hardest hit among RBC's targets was Atlas Iron, which it says will record an underlying loss of $48 million for the year to June 30, worse than its initial forecast of a $9 million deficit. The outlook is equally grim in 2015-16, with RBC now expecting Atlas to post a loss of $34 million, rather than a $38 million profit.
RBC also expects BC Iron and Mount Gibson Iron to report losses this year, and Mount Gibson to remain in the red next year.
The trigger was RBC's revision of iron ore price forecasts from $US100 a tonne to $US85/t for 2015. RBC expects iron ore to remain in the $US80/t to $US85/t band until 2018, down from $US90/t to $US95/t.
The iron ore spot price was last night worth $US75.84/t.
Source: The West Australian
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