Wednesday, 04 Jan 2012
Bloomberg quoted according to Mr Chris Weston IG Markets institutional dealer that Iron ore prices may decline by as much as 11% on average this year because of concern that global economic growth may falter.
Mr Weston said the steelmaking raw material may average between USD 150 and USD 160 per tonne in 2012. Iron ore with 62% content delivered to the port of Tianjin, China averaged USD 167.60 a ton in 2011 and traded at USD 138.50 on December 30.
He said that “I see flat trade, I don’t see any explosive price action to the upside. There are obviously some real risks to global growth and Chinese growth as well.”
Mr Weston said “I do see some positivity in terms of the supply side. There is potential for substantial delays in the Brazilian projects, so that will keep prices relatively elevated and supported.”
Commodities from wheat and palm oil to copper declined in 2011 as the European debt crisis and declining global growth stoked concern that demand for raw materials will shrink. Economic growth in China will slow to 8.5% this year after growing 10.4% in 2010, the Organization for Economic Cooperation and Development projected on November 28.
Ore delivered to China from Australia, the biggest exporter, will average USD 150 per tonne in 2012 up from a forecast USD 140 a ton.
(Sourced from Bloomberg)
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