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Fitch Solutions joins iron ore price upgrade club

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Update time : 2022-02-21 20:46:33

Fitch Solutions has dramatically revised up its iron ore price forecasts for the next two years, noting renewed economic stimulus by the Chinese government targeted towards the infrastructure sector.

The research arm of the global ratings agency has lifted its iron ore price forecast for 2022 from $US90 a tonne to $US120/t and its prediction for 2023 from $US75/t to $US110/t.

The upgrade for iron ore comes after BHP last week posted a 144 per cent jump in first-half profit to $US9.44 billion ($13.22b) while Fortescue Metals Group’s profit slide 32 per cent to $US2.8 billion. Rio will report its full-year results on Wednesday.

“Chinese demand has once again started picking up, and will remain strong in 2022-2023 with the government’s renewed stimulus towards the infrastructure sector in the face of slowing economic growth,” Fitch said in a note.

“On the supply side, we do not expect any significant increase in iron ore supply from major producers who will place an emphasis on value over volume in 2022, and this is added to high supply risks over weather issues and continued COVID-19 operational disruptions.”

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