In London trade, BHP Billiton fell 0.3 per cent, while Rio Tinto rose 0.2 per cent
The iron ore price is holding steady, defying calls from a string of analysts for substantial falls over the rest of 2016 and into next year.
Iron ore was unchanged at $US55.80 a tonne overnight, according to The Steel Index, marking its third day in a row above government estimates after it breached the $US55 a tonne threshold this week for the first time since mid-May.
But Macquarie analysts are doubtful the price of the key export will push much higher, despite its surprisingly strong rebound over the first half of 2016 due to restocking demand from Chinese steel mills and speculative trade.
“It is certainly fair to say overall performance from commodities has been better than feared at the start of the year,” Macquarie wrote in a research note.
“For industrial commodities the pre-Chinese New Year demand vacuum saw many prices hit multi-year lows, with strong destocking amplifying the whiplash on raw materials.”
Iron ore hit a trough below $US40 a tonne in December last year, before surging to almost $US70 on news of Chinese government stimulus plans.
“Sub-$US40 a tonne pricing was a whiplash on the downside; at the same time the push above $US60 a tonne was a whiplash the other way,” Macquarie wrote.
“Given that China (and the world) is going through a slightly more commodity-intensive phase of growth, we have upped our 2016 demand forecasts across almost all commodities.
“However, we don’t expect demand to be strong enough to drive us into bottlenecks.”
Last month, Macquarie published iron ore price forecasts of $US52 a tonne for the September quarter, falling to $US48 in the December quarter. The bank tips a bottom of $US47 in calendar 2018 and a recovery to $US60 two years later.
The bank’s forecasts are somewhat bullish compared to its peers. Citi predicts an average price of $US42 in 2017, while NAB expects a fall to $US40 next year.
In London trade, BHP Billiton fell 0.3 per cent, while Rio Tinto rose 0.2 per cent.
