COLUMN-Record low iron ore price forecast looks optimistic: Russell
--Clyde Russell is a Reuters columnist. The views expressed are his own.--
By Clyde Russell
LAUNCESTON, Australia, Jan 29 (Reuters) - You know the outlook for a commodity is bleak when even a record low consensus forecast for prices looks overly optimistic.
This appears to be the case for iron ore, where a Reuters poll of analysts published on Wednesday showed a median estimate of $68 a tonne for spot Asian prices .IO62-CNI=SI in 2015.
If the median forecast proves accurate, it would be well below the 2014 average of $97 a tonne, and lower than the previous record low year average of $86 in 2009.
The problem with the forecast of $68 a tonne average for this year is the current spot price of the steel-making ingredient is already 7.8 percent lower, closing on Wednesday at a fresh six-year low of $62.70.
This means that for the median estimate of the 13 analysts polled to be realised, the spot price will have to rise over the rest of the year, and presumably spend some time above $68 a tonne in order to make up for the current period of weakness.
What is a known fact is that over the rest of 2015, supply is going to increase as the big three global miners, Brazil's Vale and the Anglo-Australian pair of Rio Tinto and BHP Billiton, raise output. Continuación...