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Global investment management firm Goldman Sachs has slashed its iron ore price forecast by 18 per cent, citing weakened global demand.

The iron ore price has been downgraded to $US90 a tonne, down from $US110.

Goldman flagged risks of China’s oversupply in steel becoming increasingly evident, as output targets could be trimmed. A slower recovery rate in property sales saw demand for steel fall by five per cent.

The weakened demand in China may result in a surplus of iron ore, prompting Goldman to revise the iron ore demand to “flat”.

Goldman said that 2023 was the first full year of global surplus in iron ore since 2018 and could be followed by an even larger surplus in 2024.