Goldman’s iron ore flying pig

I haven’t seen this report so can’t comment directly but here are Goldman’s new iron ore forecasts:

• Q1 US$120 a tonne
• Q2 US$115 a tonne
• Q3 US$105 a tonne
• Q4 US$100 a tonne
• 2025 $95
• 2026 $93
• 2027 $92
• 58% benchmark price to be 89% in 2024, 86% in 2025, and 83% in 2026 and 2027.

None of these prices is anywhere low enough to cause any rationalisation in seaborne supply.

Yet, Goldman’s Chinese property outlook quite rightly includes this doozy:

That 50% fall in property contruction volumes over 2025/26 coincides with ramping supply from Simandou, Brazil and Australia.

All things equal, it will mean a swing to surplus of 100-200mt of iron ore through 2027. Then another 100mt by 2030.

This will require a deep cost curve shakeout of sustained prices at $50 or so.

My fun case of $20 is when we get the downside panic that comes with it.

Goldman’s price outlook is nonsense.