| Announcements | ||
| Macquarie cuts forecast for coal and iron ore - 18 Nov, 2008 | ||
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Reuters reported that Investment bank Macquarie had cut its 2009 forecasts for base metals, coal and iron ore by up to 60% to reflect the deteriorating global economic outlook. Macquarie said in a report that "We had delayed the issuing of new forecasts for around a month so that we could better assess the changing dynamics of global growth and the prospects for recovery. We are more pessimistic than we were a month ago and so are the numbers." It lowered 2009 contract prices of Australian iron ore fines by 20% to USD 115.7 a tonne, which would mark a first annual decline in seven years as steel makers reduce production amid growing fears over a looming global economic recession. It also said that the drastic decline in ocean freight rates has already pushed delivered prices of Australian iron ore to well below Chinese domestic iron ore costs, causing 2008 Chinese production to fall. It also cut price estimates for copper and zinc by 43% and 40%, respectively, to 170 US cents per pound and 51.3 cents per pound. For the coal sector, the thermal coal price forecast was lowered by 38% to USD 105.0 per tonne free on board and the hard coking coal estimate was slashed by 60% to USD 140.0 to consider drastic output reduction plans by global steel giants such as ArcelorMittal. It joins a growing number of research houses that have lowered their outlook for the commodities sector, which had enjoyed a strong performance until the first half of 2008 before sharply correcting in recent months as the credit crisis has threatened to reduce demand for oil, metals, coal, iron ore and grains. | ||
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