Iron ore is a huge export for Australia (one China has so far not banned ... its party time until they do).

Goldman Sachs on the rock:

  • 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.