Oil and iron ore have had a shocker of a year and National Australia Bank says the two commodities may fall further in 2016.
"Risks remain tilted to the downside amidst stubborn oversupply and weak demand conditions," the bank said in a note Tuesday.
For iron ore, NAB expects a sharper slowdown in global steel production, particularly in China where the economy -- and construction -- continues to slow, might push the metal's price toward $30 a tonne, around Australian miners' breakeven. The bank is currency forecasting an average price of $42 a ton.
Spot iron ore for China delivery was at $39.40 a ton on Monday after touching a low of $37 earlier in the month, the lowest since late 2008 when data began to be compiled.
"Chinese iron ore production will also remain the swing factor - while production has fallen 8.5 percent so far in 2015, this remains stronger than previously anticipated despite its lower grade and higher cost of production (above the current spot price)," it said.