(Bloomberg) -- Iron ore futures fell in China as investors weighed export data from top shippers and elevated stockpiles of the steel-making material.
Goldman Sachs Group Inc. expects the market to enter a surplus in the second half of the year on higher Brazilian exports, bank analysts wrote in a note, adding they see prices falling back to $110 a ton by the fourth quarter and below $100 in 2022.
There have been signs of improved cargoes from the major shippers and investors will get an update on the supply outlook when producers, including Rio Tinto Group and BHP Group, report quarterly production next week. Port stockpiles in China continued to hold near the highest level since May 2019.
In the near term, ongoing strong demand from China and recent robust mill margins “should limit the sustainability of any iron ore sell-off in the next few months,” according to Goldman.
Iron ore futures in Dalian fell as much as 2% before closing 1.1% lower at 1,011.5 yuan a ton. Futures in Singapore were steady at $166.35 by 3:18 p.m. local time. Hot-rolled coil futures in Shanghai rose for the second day and rebar was flat.
In Brazil, daily average iron ore exports were 1.32 million tons in the first six business days of April, up from 1.24 million tons a day during March. Flows from Australia's Port Hedland rose to a nine-month high in March.
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