Iron ore rally expected to fade in H2 as oversupply kicks in

Singapore

THE global iron ore market faces an increasingly severe oversupply, according to Citigroup Inc, which said the commodity's gains will probably be reversed in the second half.

Increases in production, including from miners that restarted output after this year's rally, coupled with likely losses in steel prices, will combine to hurt iron ore, the bank said in a quarterly commodities report received Monday. While iron ore's price declines may have been delayed, they're still coming, analysts led by Ed Morse wrote.