If youâre a shareholder of BHP Group Ltd (ASX: BHP), Fortescue Metals Group Limited (ASX: FMG), or Rio Tinto Limited (ASX: RIO), there will no doubt be one metal in particular that is of interest to you â iron ore.
Due to the significant contribution that their iron ore operations have on their respective profits, the iron ore price has a big impact on these mining giantsâ success.
This morning, BHP released its production update for the fourth quarter and full year. Within that update the Big Australian revealed that it received an average price of US$113.10 per tonne in FY 2022 for its iron ore. This was down 13% year on year from US$130.56 per tonne in FY 2021.
Investors may now be wondering where iron ore goes from here. In light of this, letâs take a look to see what one leading broker is forecasting for the steel making ingredient.
Where is the iron ore price heading?
According to a note out of Goldman Sachs at the end of last week, its analysts are expecting iron ore prices to soften in 2023.
Firstly, Goldman expects an average price of US$120 per tonne for benchmark iron ore 62% fines in 2022.
After which, its analysts are expecting a 16.7% decline in FY 2023 to US$100 per tonne. And, as you can see below, the broker doesnât expect prices to stop falling until 2026. At that point, the broker expects the iron ore price to rebound slightly.
Goldman Sachsâ forecasts are as follows:
- US$120 per tonne in 2022
- US$100 per tonne in 2023
- US$80 per tonne in 2024
- US$75 per tonne in 2025
- US$81 per tonne in 2026
All in all, the broker appears to believe that the iron ore price peak is now long behind us and it could be a downward trend from here.
The post What’s the outlook for the iron ore price in 2023? appeared first on The Motley Fool Australia.
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More reading
- ASX 200 midday update: BHP’s Q4 update, JB Hi-Fi delivers record result
- BHP share price climbs amid record year for iron ore
- BHP share price on watch after ‘strong fourth quarter’
- 5 things to watch on the ASX 200 on Tuesday
- Leading brokers name 3 ASX shares to buy today
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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