news about iron ore On the weekend Vito Racanelli, writing in Barron’s, said things are likely to get materially worse for iron ore producers before they get better.
He noted that two-thirds of the world’s mined iron ore goes to China to supply its growing economy. But he went on to point out that the country is increasing its own production of ore at a faster rate than investors are projecting.
“Moreover, China is making a concentrated effort to slow down its overheated property and construction markets, which suggests a reduced need for steel and, in turn, iron-ore imports. This is only slowly working its way into investor consciousness.’’
Iron ore is currently priced at around $134 per tonne. But Barron’s notes that Axiom Capital Management analyst Gordon Johnson expects prices to drop to $119 this year, $85 next year and $75 in 2015.