The current outlook of Iron Ore prices in Australia

Australia’s iron ore export volumes are forecast to increase by 8 percent and reach 851 million tonnes in 2016-17, that’s according to the Department of Industry’s September 2016 quarterly outlook.

Total earnings from exports are expected to increase to $54 billion, which is $5 billion more than the previous forecast as a result of the persistently high prices in the September quarter.

That being said, the iron ore price is actually forecast to decline later this year, averaging at an expected 6 percent lower in 2014 at around $45 a tonne.

Through July and August this year there was an unexpected rally in the price of iron ore to an average of $54 a tonne. Because of the rally, forecasted iron ore price has been revised up to $49 per tonne for 2016 but the price is still expected to decline, with the 2017 forecast at $47 a tonne for 2017.

The higher iron ore prices have been attributed to a stronger demand from China’s steel sector, which in turn is underpinned a resurgence of the Chinese construction sector.

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