Category: Stock Market

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a disappointing decline. At the time of writing, the benchmark index is down 0.6% to 6,649 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Allegiance Coal Ltd (ASX: AHQ)

The Allegiance Coal share price is down a massive 66% to 18.5 cents. Investors have been selling this coal miner’s shares following the release of a very disappointing update. Allegiance Coal has been unable to successfully ramp up production to previous expectations at its two operating mines. This has left it in a precarious position financially. In order to keep the lights on, the company has established a $5 million equity facility.

Hub24 Ltd (ASX: HUB)

The Hub24 share price is down 7% to $22.13. The catalyst for this was the release of the investment platform provider’s fourth quarter update. Although that update revealed that Hub24 achieved a record annual increase in platform inflows of $11.7 billion in FY 2022, its soft finish to the year appears to have spooked investors. Hub24 revealed that it finished the period with funds under administration (FUA) of $65.6 billion. This was an increase of 11.8% year on year, but down 4% quarter on quarter.

Suncorp Group Ltd (ASX: SUN)

The Suncorp share price is down over 4% to $11.27. This morning the team at Ord Minnett downgraded this insurance giant’s shares to a hold rating and cut the price target on them to $13.25. It isn’t a fan of the company’s decision to sell its banking operations.

WiseTech Global Ltd (ASX: WTC)

The WiseTech share price is down over 5% to $44.80. As well as being hit by weakness in the tech sector, the logistics solutions software company’s shares were dealt a blow from Macquarie this morning. The broker has downgraded them to an underperform rating with a $42.00 price target. The broker suspects that the company’s margins may be peaking, which it fears could weigh on its valuation.

The post Why Allegiance Coal, Hub24, Suncorp, and WiseTech shares are dropping appeared first on The Motley Fool Australia.

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More reading

• Why did ASX coal share Allegiance just plunge 65%?
• ASX 200 midday update: BHP’s Q4 update, JB Hi-Fi delivers record result
• Hub24 share price sinks 7% despite record year
• ‘Not bricks and mortar’: The real value in ANZ acquiring Suncorp’s banking operations
• Here are the top 10 ASX shares 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 positions in and has recommended Hub24 Ltd and WiseTech Global. The Motley Fool Australia has positions in and has recommended Hub24 Ltd and WiseTech Global. 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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ASX earnings season is almost upon us.

Investors have been inundated with macro news surrounding global and national inflation levels and rising interest rates over the past months. Now we’re about to drill into the company specifics.

Commencing in August, we can expect the majority of the 2,000-plus ASX listed companies to report their full-year results, and we’re likely to see some volatility on some of those results.

In the first-half results reported six months ago, more companies beat earnings expectations than fell short of them.

But with rising labour and energy costs, supply chain snarls, and the above-mentioned rate hikes, there are some bearish speculations circling that this time around the number of companies falling short of guidance could be significantly higher.

James Gerrish, author of Market Matters, isn’t among those bears. Speaking to Livewire, Gerrish said he believes “earnings season will be a lot better than what the market is positioned for”.

Uncertainty ahead of ASX earnings season

Gerrish said there’s a lot of uncertainty about what to expect from ASX shares when they report their earnings in a few weeks’ time.

“The forecasting on one side is difficult, so we haven’t seen a lot of analyst revisions leading up to it. When uncertainty is high, they tend to sit on their hands,” he said.

However, the market hasn’t been idle, with some big falls for the major indexes.

“We’re probably priced for a recession,” Gerrish said. “To me, I think that earnings season will be a lot better than what the market is positioned for.”

According to Gerrish (quoted by Livewire):

I think there will be some big moves at the stock level. It’s going to be the nuances on how companies are managing the uncertainty that really counts. I think we’ll go into a period of earnings downgrade and re-rates to the downside. That’s why we’ve seen an artificially depressed valuation in the market. But that’ll change. You’ll see a transition back to more normal multiples.

Look for companies walking the talk

It’s easy for companies to say they’re handling the uncertainties. But Gerrish advises looking beyond the companies, saying that’s what they’re doing to those actually walking the talk.

“It’s the nuances in the statement, and the quality of the balance sheets,” he said. “Not just throw away lines about managing uncertainty, but proper things they are doing to handle supply chains, lock in supplies at costs, manage wage pressures … real actions rather than hollow rhetoric.”

Gerrish said investors might want to investigate ASX shares that have already been beaten down on expectations of increasing costs or decreasing earnings.

“You think about property, for one. There’s a lot of Armageddons built into property stocks, in my view. You’ve got the upside potential for distributions,” he said.

Gerrish named Dexus (ASX: DXS) and Stockland Corp Ltd (ASX: SGP) as property shares that could outperform.

He also tipped big-name retail shares Metcash Ltd (ASX: MTS) Wesfarmers Ltd (ASX: WES) as companies that will provide earnings certainty and some forward guidance.

However, income investors expecting another record half of payouts from the big miners could be disappointed.

“Earnings are high so dividend expectations are high. I think there could be some disappointment on the dividends announced by resources, energy companies, and the like,” Gerrish said.

The post Could ASX earnings season be ‘a lot better than what the market is positioned for’? appeared first on The Motley Fool Australia.

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More reading

• ASX 200 retail shares rise as consumer confidence improves
• Brokers: Buy these 2 leading ASX 200 shares in July
• AMP share price in focus as Mirvac wins control of $7.7 billion office fund
• What I love about these 2 ASX dividend shares
• ‘High quality’: Why Wesfarmers shares are a buy in this broker’s books

Motley Fool contributor Bernd Struben 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 positions in and has recommended Wesfarmers Limited. 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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Shares of Pendal Group Ltd (ASX: PDL) are in a trading halt on Tuesday.

Whilst the company opened the session, trading of its stock was paused due to a company-requested trading halt just before midday.

Before the halt, investors had bid Pendal shares more than 4% higher to $4.29 apiece.

Why are Pendal shares on ice?

The company made the request amid ASX Listing Rule 17.1, asking for an immediate one-day halt from 19 July.

Pendal says this is due to a pending announcement on a potential transaction. It said:

[T]he trading halt is requested for the purpose of issuing an announcement to the market concerning
discussions in relation to a potential control transaction.

PDL expects that the ASX Announcement will be made as soon as possible, and in any event,
prior to the open of trading on 20 July 2022.

The ASX granted the request shortly after and Pendal shares have been on ice ever since.

As such, investors will now wait for the next update.

In the last 12 months, Pendal has sunk more than 46% into the red. It bounced from 52-week lows last week after a year of drawdown.

It now trades well below its pre-pandemic levels, as illustrated below.

The post Why are Pendal shares in a trading halt? appeared first on The Motley Fool Australia.

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More reading

• Why JB Hi-Fi, Mesoblast, Pendal, and Woodside shares are pushing higher
• Here are the top 10 ASX shares today
• Why BHP, Jumbo, Pendal, and Rio Tinto shares are sinking today
• Pendal share price slumps 10% to multi-year low amid continued outflows
• ASX 200 midday update: Rio Tinto’s update, BHP and Fortescue sink, AVZ remains suspended

Motley Fool contributor Zach Bristow 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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S&P/ASX 200 Index (ASX: XJO) coal shares have been on an upwards trajectory lately, leading these market favourites to peak at near-10-year highs today.

The Whitehaven Coal Ltd (ASX: WHC) share price lifted to its highest point since 2011 today – touching $6.19 in afternoon trade.

Meanwhile, shares in New Hope Corporation Limited (ASX: NHC) surged to trade at $4.52 today – the highest the stock has been since October 2012.

Shares in the coal companies have now gained 123% and 92% respectively year to date. For comparison, the S&P/ASX 200 Energy Index (ASX: XEJ) leapt nearly 24% this year while the ASX 200 has slumped 12%.

Let’s take a look at what’s been behind ASX 200 coal shares’ recent strong performance.

What’s driven these ASX 200 coal shares to 10-year highs?

There’s a reason behind ASX 200 coal producers’ recent brilliant performance. And it’s a simple one.

The price of coal has rocketed in 2022, driven higher by an energy crunch brought about by Russia’s invasion of Ukraine.

Newcastle coal futures are currently trading at US$396.05 a tonne, according to Trading Economics. That’s 133% higher than it was at the end of 2021 and around 9% lower than its record high of US$435 a tonne.

On that note, Whitehaven expects to report “its strongest ever” earnings for financial year 2022.

It’s flagged that its full year earnings before interest, tax, depreciation, and amortisation (EBITDA) could come in at a whopping $3 billion yesterday. That’s up from just $200 million in financial year 2021.

The positive outlook saw the Whitehaven share price lift 5% yesterday while that of New Hope gained nearly 3%.

And growing expectations China could soon welcome back Australian coal exports have also likely bolstered the ASX 200 coal shares.

No doubt all eyes will be on the energy giants when they release their full year earnings later this year.

The post These ASX 200 coal shares are smashing 10-year highs on Tuesday appeared first on The Motley Fool Australia.

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More reading

• Why Ansell, EML, Suncorp, and Whitehaven Coal shares are charging higher
• Could ASX coal shares be set for a boost?
• 11-year high: Whitehaven share price surges 8% on record $3b profit
• ASX 200 midday update: ANZ to buy Suncorp Bank for $5bn, Whitehaven Coal’s update
• Will it flip? Rumours stir up interest in ASX 200 coal mining shares

Motley Fool contributor Brooke Cooper 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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The Lake Resources NL (ASX: LKE) share price is pushing higher today.

At the time of writing, the lithium share is trading 11% higher at 69.5 cents apiece, bouncing from its 52-week low of 60.5 cents on 14 July.

In broader market moves, the S&P/ASX 300 Metals and Mining Index (ASX: XMM) is rangebound, currently 0.23% lower in early afternoon trading.

Why’s the Lake Resources share price lifting?

Investors have pushed the share higher on no news today. Noteworthy though is the price of lithium carbonate.

It has remained buoyant these past few months at $103,154 per tonne, while other commodity sectors have come down from earlier peaks.

For example, before its recovery today, Brent Crude – the world’s oil benchmark – had been flailing over the past month coming down off multi-year highs in March.

Hence, as a basket, lithium shares have strengthened lately. Nevertheless, they are yet to recover from a large drawdown incurred earlier in the year.

Lake fell from a 52-week high of $2.45 on 5 April. After plateauing around May, the rug was pulled beneath it again amid the June selloff, as illustrated below.

Moreover, the Lake Resources share price is recovering from the effects of a scathing research report from short seller J Capital.

Lake Resources refuted the claims, saying the report “puts forth incorrect information on technical matters and inaccurate assertions on Lake Resources’ progress to date”.

Although Lake issued a response to the report’s claims, the fallout added to the company’s losses in 2022 so far.

The share also was one of the most shorted names on the ASX last week.

As reported by TMF on 15 July, “[a]round 9.6% of its stock was in the hands of short sellers at the last count”.

Over the last year, the Lake Resources share price has held a gain of more than 80%.

The post Why is the Lake Resources share price rallying 11%? 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
• These are the 10 most shorted ASX shares
• Why are Lake Resources shares receiving the most attention on Friday?
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why Aurizon, Bega Cheese, Flight Centre, and Lake Resources shares are sinking

Motley Fool contributor Zach Bristow 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) has followed Wall Street’s lead and dropped into the red. At the time of writing, the benchmark index is down 0.5% to 6,653.4 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are pushing higher:

JB Hi-Fi Limited (ASX: JBH)

The JB Hi-Fi share price is up 4% to $42.43. Investors have been buying this retail giant’s shares after it reported a record result in FY 2022. JB Hi-Fi expects to post a 3.5% increase in sales to $9,232 million and a 7.7% increase in net profit after tax to $544.9 million. Both will be records for the retailer and were driven by growth across the business.

Mesoblast limited (ASX: MSB)

The Mesoblast share price is up 7% to 91.5 cents. The catalyst for this was the release of an update on the biotechnology company’s rexlemestrocel-L product candidate. That update revealed promising results from a trial treating patients with class II/III chronic heart failure with reduced ejection fraction.

Pendal Group Ltd (ASX: PDL)

The Pendal share price was up over 4% to $4.29 before being placed into a trading halt. The trading halt request reveals that the fund manager has received another takeover proposal. No other details have been provided. Earlier this year, the company rejected a $6.23 per share offer from Perpetual Limited (ASX: PPT).

Woodside Energy Group Ltd (ASX: WDS)

The Woodside share price is up 3% to $32.28. Investors have been buying Woodside and other energy shares today after oil prices surged higher overnight. Traders were bidding oil prices higher amid concerns over Russia’s gas supply to Europe. The S&P/ASX 200 Energy index is up 2.1% this afternoon.

The post Why JB Hi-Fi, Mesoblast, Pendal, and Woodside shares are pushing higher appeared first on The Motley Fool Australia.

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More reading

• ASX 200 retail shares rise as consumer confidence improves
• Why are ASX 200 energy shares having such a stellar Tuesday?
• How to beat the market with ‘boring’ ASX shares: fundie
• ASX 200 midday update: BHP’s Q4 update, JB Hi-Fi delivers record result
• Why is the Woodside share price leaping today?

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The Allegiance Coal Ltd (ASX: AHQ) share price has cratered on Tuesday.

The move follows the ASX coal miner releasing its quarterly activities and cash flow report and announcing an equity facility and strategic review.

The company’s coal production was “considerably below our target” in the June quarter. The company has also secured a $5 million equity facility to tide it over while it reviews its liquidity requirements.

Allegiance Coal is focused on the development, operation, and supply of steel-making coal to the seaborne market. It has operating mines in the United States and a development project in Canada.

It currently has three mines online called Tenas, Black Warrior, and New Elk.

Allegiance share price crashes 65% on liquidity concerns

The ASX coal share has plummeted by 63.39% to trade at 21 cents at the time of writing.

Here are the key points from its activities report for the three months ending 30 June:

• Coal sales revenue totalled US$32.1M compared to US$14.5M in the prior quarter
• Cash receipts from customers of A$50.5M (approximately A$6.2M were carryover receipts)
• Positive net cash from operating activities of A$13.6M
• Run-of-mine (ROM) coal production totalled 220kt against 148kt for the March quarter. This was up 48% and “continuing the strong upward trend, but still considerably below our target”.

What happened in the June quarter?

Allegiance Coal told ASX investors that “severe labour shortage within BNSF [Railway] and Union Pacific rail systems due to COVID lay-offs” had caused problems at New Elk.

This includes “a build-up of coal inventory at New Elk’s rail load-out and mine stockpiles and, more critically, a delay in getting coal to port for sale”.

In its statement, the ASX coal miner said:

New Elk is due to receive a second rail set end of this month which will double capacity to move coal to port notwithstanding an increase in train cycle times. Ongoing delays at McDuffie Coal Terminal caused a New Elk 80kt vessel scheduled to load on 25 June to be delayed with loading now scheduled in July.

The impact of strong commodity prices

Allegiance reported average coal sales prices of US$258/t in the June quarter against US$261/t in the March quarter.

The prices ranged from US$360/t for high-vol A to US$222/t for a trial cargo of high-vol B product.

The price for premium low-vol hard coking coal continued its recent downward trend but remained historically high.

Allegiance said thermal coal prices “look extremely strong”. This is due to the European ban on Russian coal purchases, and the threat of imported Russian gas disruptions.

Allegiance said this meant ” excellent opportunities for high energy low sulphur coals sales into Europe”.

The company said weakening demand for steel in Asia and Europe amid recession fears had resulted in coking coal prices falling “quite dramatically” in the June quarter, with thermal coal prices now outperforming coking coal.

“We have already taken advantage of the strong prices for thermal coal contracting two small cargoes for delivery in H1 FY 23 into Europe and are assessing medium-term opportunities in this market”.

What did management say?

Allegiance Coal CEO Jon Romcke said:

The results for the June quarter demonstrate the impact of strong coal prices coupled with improvement in the production capability of both the Black Warrior and New Elk mines where the quarterly ROM production figures were the best on record since Allegiance commenced operations.

Unfortunately, the ability of the mine to port logistics chain to keep pace with production has affected the timeliness of cashflow receipts for the Company from sales and inventory finance arrangements.

We are working to address the logistics constraints and improve the working capital position at Allegiance.

What’s next for Allegiance coal?

Allegiance Coal has entered into a A$5 million equity facility with Regal Funds Management. It has already drawn down $3 million. In exchange, the fund will be issued with shares at a discount.

Allegiance Coal explained why it had decided to obtain the equity facility:

The Company has been unable to successfully ramp up production to previous expectations at its two
operating mines. In addition, the Company has been unable to secure medium term equipment financing at both Black Warrior and New Elk, which has driven lower than expected performance.

In light of the lack of available financing, the Company is considering different capital initiatives to fund equipment acquisition and upgrades at both mines.

Legacy coal sales contracts at New Elk, coupled with production constraints, staffing issues and poor logistics performance in transporting coal to port, have meant that the mine is running at an operating cash flow loss which has significantly constrained cash flows.

It is currently unclear if Black Warrior or New Elk have the capability to meet, within a material margin,
previously advised target production rates.

Allegiance expects to complete the strategic review before the end of August.

The value of the ASX coal miner’s shares is down 71% over the past 12 months. This compares with a 9% loss for the S&P/ASX All Ordinaries Index (ASX: XAO).

The post Why did ASX coal share Allegiance just plunge 65%? appeared first on The Motley Fool Australia.

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More reading

• Why JB Hi-Fi, Mesoblast, Pendal, and Woodside shares are pushing higher
• Why has the Piedmont Lithium share price tumbled 30% in a month?
• Why is the Santos share price on such a tear today?
• What’s the outlook for the iron ore price in 2023?
• ASX 200 retail shares rise as consumer confidence improves

Motley Fool contributor Bronwyn Allen 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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The Piedmont Lithium Inc (ASX: PLL) share price is rangebound in afternoon trade on Monday.

At the time of writing, the share is flat at 50.5 cents apiece, a shade off its 52-week low of 48.5 cents.

Zooming out, Piedmont has lost more than 28% in the past month of trade and has fallen from a previous high of 93.5 cents on 31 May.

In broad market moves, the S&P/ASX 300 Metals and Mining Index (ASX: XMM) is flat on the day as well.

What’s up with the Piedmont Lithium share price?

Investors have punished the share in CY2022 as a good chunk of the global commodity trade begins to unwind.

Whilst lithium continues to remain buoyant, key price drivers such as Brent Crude oil have consolidated from a top in March.

Copper has followed suit and retraced heavily from its March highs. It now trades back in line with November 2020 levels.

The weakness in these key industrial metals has transposed over the wider metals & mining sector. As a basket, it too has been clamped down recently, shown below in deep blue.

In fact, as the chart shows, each of these instruments traded with a tight fit over the past 3 months, with each realising losses at the same pace.

This is not unreasonable to see, seeing the high correlation of various shares within the sector.

For the Piedmont share price (shown in red), it has traced this basket with striking similarity as investors unload shares, along with the bulk of its peers in the ASX mining index (deep blue).

Whilst correlation doesn’t mean causation, the trend does suggest there is weakness in the wider mining sector, as represented by each of these instruments.

Meanwhile, earlier this month, the company also announced that its 25%-owned North American Lithium (NAL) program in Canada aims to start producing lithium spodumene next year.

This will require a large capital expenditure bill to bring infrastructure up to speed.

With the battery metal still commanding a premium, this could inflect positively for Piedmont if investors reward the share price.

With that in mind, time will tell what’s in store for the Piedmont share price next. It is down 43% in the past 12 months.

The post Why has the Piedmont Lithium share price tumbled 30% in a month? appeared first on The Motley Fool Australia.

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More reading

• What’s clamping down on the Piedmont Lithium share price?
• These 3 ASX All Ordinaries shares are hitting new 52-week lows today
• Down 18% in a month, is the Piedmont Lithium share price a buy?

Motley Fool contributor Zach Bristow 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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The Santos Ltd (ASX: STO) share price is defying the market’s struggles on Tuesday to launch higher amid surging oil prices.

At the time of writing, the Santos share price is $7.33, 2.37% higher than its previous close. Earlier today, it reached a high of $7.435 a share, a gain of 3.85%.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently down 0.02%, dragged lower by the flailing tech sector.

Let’s take a closer look at what’s driving the ASX 200 energy giant to outperform today.

What’s energising the Santos share price on Tuesday?

Santos’ stock is taking off on Tuesday alongside many other ASX energy shares.

In fact, the S&P/ASX 200 Energy Index (ASX: XEJ) is currently the ASX 200’s best performing sector, up 2.31% in early afternoon trading.

Its rise likely comes on the back of surging oil prices. The price of Brent crude oil gained 5.1% overnight to trade at US$106.27 a barrel while the US Nymex crude price lifted 5.1% to reach US$102.60 a barrel.

The commodities’ rise came amid a weakening US dollar and news a Russian gas giant told European customers it can’t guarantee gas supplies, Reuters reports.  

Right now, the Santos share price is among the ASX 200’s energy sector’s best performers.

However, it’s shadowing the gains of Whitehaven Coal Ltd (ASX: WHC), Beach Energy Ltd (ASX: BPT), Woodside Energy Group Ltd (ASX: WDS), and New Hope Corporation Limited (ASX: NHC). They’re each currently up more than 3%.

The post Why is the Santos share price on such a tear today? appeared first on The Motley Fool Australia.

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• ASX 200 midday update: BHP’s Q4 update, JB Hi-Fi delivers record result
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Motley Fool contributor Brooke Cooper 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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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.

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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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