Iron-ore: Risks further upside in the first half 2021 – Goldman Sachs

In the view of the analysts at Goldman Sachs, iron-ore prices have more room to the upside amid a potential market deficit during the first half of this year.

Key quotes

“We continue to favour upside exposure to iron ore in H 1-21.” 

“Our balance points to a material deficit during the period.” 

“Supply disruption risks remain elevated in the near term on seasonal weather trends in both Western Australia and Brazil. “

“On the demand side, China's mill restocking is also a current tightening influence onshore. Onshore COVID restrictions and cold weather present potential near-term headwinds but a strong pipeline of construction activity post-LNY should underpin prices into Q2.” 

“We maintain our 6M $150/t target, which based on the forward curve implies dips should be bought.”