Citigroup cuts iron ore, coal outlook as oil rout reduces supply costs

Singapore

CITIGROUP Inc reduced iron ore and coal forecasts as cheaper oil and declines in producers' currencies combine to cut supply costs, signalling that the energy rout is feeding through to other commodities. Miners' shares sank, with Rio Tinto Group plunging in London as copper tumbled.

Iron ore will average US$58 a tonne in 2015 and US$62 a tonne in 2016, down from estimates of US$65 for both years, analysts including Ivan Szpakowski wrote in a report dated Wednesday. The forecasts for coking coal and thermal coal were reduced for the same period by as much as 18 per cent.