Goldman Sachs raises iron ore price forecast

Goldman Sachs analysts raised their price expectations foriron ore, saying that China’s unexpected increase in iron ore use is increasingsupply shortages.

Since the fatal dam breach in a mine in Vale, the iron oreprice of the Singapore Exchange has soared 37%. As the largest supplier of ironore, Vale's production capacity fell by 93 million tons after the disaster.Vale, based in Rio de Janeiro, said it would take two to three years to achieveits previous 400 million tons production target.

At the same time, it is not easy for Vale's competitors tofill this gap. Goldman Sachs raised its average iron ore price target for 2019from $81 per ton to $91 per ton, in line with Brazilian bank analyst GabrielaCortez's prediction.