In response to the rise in iron prices, Raymond James analyst Brian MacArthur raised his target prices for Champion Iron Ltd. (“outperform”) to $7 from $6.50 and Labrador Iron Ore Royalty Corp. (“market perform”) to $39 from $37. The averages on the Street are $6.85 and $39.71, respectively.
“Iron ore prices continue to increase with P65 prices now over US$215 per ton,” he said. “In our view, the recent prices reflect ongoing strong demand supported by commitments to reduce emissions from steel making. In addition, 1Q production from major producers (Vale and Rio Tinto) that was in-line, or lower-than-expected, as well as terminal challenges (CSN) highlight the supply challenges the industry is currently facing to meet demand. Given this situation, we have again increased our 2021 calendar Fe 65 price forecast.”