Iron ore rally to fade on increasingly severe oversupply - Citi

According to Citi bank’s quarterly commodity report, the recent rally in the iron-ore prices is likely to fade on severe oversupply, Bloomberg reports.

Key Findings from report:

The global iron ore market faces increasingly severe oversupply

Gains in price will probably be reversed in the second half

Gains in production coupled with likely losses in steel prices will combine to hurt iron ore

Prices may remain high in the second quarter before the rally fades

Weaker-than-expected Australian exports and more resilient Chinese steel production have kept prices elevated.

However, both trends are likely to reverse in the medium and long term.