Morgan Stanley cuts back iron ore outlook

Prices fall: A file picture showing machinery operating in a pit at Rio Tinto Group’s West Angelas iron ore mine in Pilbara, Australia. Iron ore prices that peaked near US95 in mid-February have sunk since then amid rising supplies from producers. — Bloomberg

SINGAPORE: Iron ore forecasts at Morgan Stanley have been chopped back for the remainder of the year, with the bank flagging prospects for rising low-cost production and the likelihood that the worldwide surplus will increase every year through to 2021.

The commodity will average US$50 a tonne in the third quarter, 23% down from an earlier estimate, and US$55 in the final three months, a 15% reduction, according to a report.