Long term market fundamentals - DesjardinsBelow is a news article from Canada today. Desjardins Securities is bullish on behalf of the iron ore mining industry over the next 7 year.
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Consolidated Thompson to benefit as global iron ore supplies tighten
David Pett, <a href=https://www.financialpost.com/Consolidated+Thompson+benefit+global+iron+supplies+tighten/3767720/story.html>Financial Post</a> · Wednesday, Nov. 3, 2010
Iron ore prices will strengthen in 2011 and should give a boost to shares in Consolidated Thompson Iron Mines Ltd. <b>says John Redstone, an analyst at Desjardins Securities</b>.
Mr. Redstone maintained his "buy" rating and $13.90 price target on one of the world's few pure iron ore plays, predicting prices for the commodity used in steel production will <b>hit US$180 per tonne next year</b>, up from roughly US$160 today.
"Recently, there have been calls from within <b>India to restrict or eliminate iron ore exports</b> because of demand from domestic steel mills," Mr. Redstone said in a note to clients, adding that India privides roughly 11% to 12% of the total exported material.
The analyst said there are reports that <b>stockpiles of iron ore in China are being drawn down</b> as shipments from India have declined.
While there are numerous iron ore projects in the works that could potentially boost supply to offset demand, Mr. Redstone said only a few are economic and most of them are still at least five years away from full production.
"In our analysis we estimate <b>694 million tonnes of incremental production could be added by 2017</b>," the analyst wrote.
"However, the <b>growth in incremental demand would still be greater by over 50 million tonnes</b>. In addition, <b>demand would continue to grow next year with no supply-side response</b>."