Iron ore to slide to $US40 mark as winter approaches in China

Jasmine Ng

Updated Aug 17, 2016 – 3.21am, first published at 3.16am

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Iron ore's 2016 rally may be about to face a challenge from the changing of the seasons. Morgan Stanley has forecast that prices may tumble back to $US40 a tonne this half as the approach of winter in China typically blunts steel demand and output.

"Our short-term forecast still features a September-October seasonal pullback as China's steel demand and production rate abates," analysts including Joel Crane wrote in a report. Over the past 10 years, iron ore prices have on average dropped in September, October and November, according to the report.

Bloomberg