Bloomberg reported that Macquarie Group Ltd and JPMorgan Chase & Co have raised their Forecasts for annual contract prices for iron ore after a surge in demand from China

Macquarie analysts led by London based guru Mr Jim Lennon said in a report that Australian benchmark iron ore prices may rise 30% as compared with their previous estimate of 10% gain.

Macquarie raised its forecast to USD 1.25 per dry metric tonne unit for Australian iron ore fines.

Macquarie analysts said “Undoubtedly, rampant Chinese growth is still the main story in the steel industry. We remain very bullish on Chinese demand growth through 2010 and beyond, which will create tightness in the steel market during the second half of next year.”

JPMorgan also raised its forecast increase to 20% from 10%.

JPMorgan thus joins UBS AG and Goldman Sachs JBWere Pty in predicting a 20% gain.

(Sourced from Bloomberg)