Citigroup predicts iron ore price fall below $ 40 per ton

Citigroup expects iron ore prices to drop to $ 36 a tonne in the third quarter and remain below $ 40 for the rest of the year as large miners continue to increase their supply capacity and demand from China declines.

Iron ore has lost 60 percent in the past 12 months, dropping below $ 50 a tonne this month amid a glut of market glut with mega miners such as Vale, Rio Tinto and BHP Billiton.

Citigroup said: "We forecast iron ore exports to grow to more than 110 million tonnes in 2015, of which 68 million tonnes will be supplied to Rio Tinto." Iron ore will fall to $ 36 per tonne in the third quarter from the previously predicted $ 44 per tonne in April-June and should reach $ 38 per tonne in the last quarter of the year, according to Citigroup. She predicts an iron ore price of $ 40 per tonne next year, $ 39 per tonne in 2017 and $ 40 per tonne in 2018.

Iron ore prices for future supplies will continue to fall, and the market situation is more dire than ever for miners just trying to stay in business. Australian miner Atlas Iron is the latest victim of the strategy of larger iron ore producers flooding the market. He said he would gradually suspend production this month due to low prices.

Experts believe that iron ore prices must fall well below cash costs over the long term to trigger production cuts. At the same time, supplies should become more stable, as they are concentrated in the hands of large and complex manufacturers.