Morgan Stanley cuts iron ore, selected base metals forecasts

Investment bank Morgan Stanley has cut its forecasts for selected base metals and iron ore on the back of lower global demand.

The bank highlighted tepid demand for copper and iron ore in China, as the wider commodities market continues to grapple with a strong dollar.

Iron ore is currently trading at six year lows, and Morgan Stanley has cut its outlook by 28% to $57 per metric ton. The 2016 iron ore forecast was cut by 13% to $65 and the 2017 forecast was reduced 5% to $71.

The bank also trimmed its current estimate for nickel by 23% to an average price of $14,815 per metric ton, and copper by 16% to $5,945 per ton in note to clients on Tuesday.

Analysts Tom Price and Joel Crane noted: “With only months left before the mid-year peak in sales of commodity-intensive goods, time is running out for China to support commodity prices in 2015.

“Instead of delivering its reliable first quarter seasonal expansion in trade, China’s metal processing industry remains dormant.”