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Citigroup says this ‘hot commodity’ is destined to cool off soon

Iron-ore, dubbed by Citigroup as one of the hot commodities of 2016, looks set to cool off. Prices may sag toward the end of the year and into 2017 as supply rises and steel demand fades, the bank said, adding to the list of banks that are calling time on an unexpected rally.

The raw material will average $51 a metric ton in the final quarter and $45 in 2017 under the base-case scenario, analysts led by Ed Morse said in a report received Tuesday. That compares with Metal Bulletin’s 62% content price of $61.23 a dry ton on Monday, and a year-to-date average of $53.59.