What’s the outlook for the iron ore price in 2023?

Three Argosy miners stand together at a mine site studying documents with equipment in the background

Three Argosy miners stand together at a mine site studying documents with equipment in the background

If you’re 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 – 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 giants’ 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, let’s 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 doesn’t expect prices to stop falling until 2026. At that point, the broker expects the iron ore price to rebound slightly.

Goldman Sachs’ 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.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

See The 5 Stocks
*Returns as of July 7 2022

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

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.

from The Motley Fool Australia https://ift.tt/arBcVim

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s