Chinese import to push up iron ore prices 30%: Goldman ‘Demand to rise 7% annually for next 3-4 years’

Print this page Posted on : 09-27-2007 by recycleinme.com

Demand for iron ore will rise by as much as 55 million tonnes, or up to 7 per cent, in each of the next three to four years as Chinese steel output grows, a Goldman Sachs analyst said.

DROP IN 2010

The increase will help drive a 30 per cent price increase next year, Mr. Paul Gray, a London-based commodities analyst with Goldman Sachs JBWere Pty, said at a Brazilian Mining Association conference in Belo Horizonte. The price will hold steady in 2009 and see a “small” drop in 2010, Mr. Gray said.

Chinese imports of iron ore, the main ingredient in steel, will rise to 565 million tonnes in 2010 from 386 million now, Mr. Gray said. China, the world’s largest steelmaker, is expected to buy 57 per cent of the world’s seaborne iron ore exports in 2010, compared with about 50 per cent now, he said.

“The seaborne iron-ore trade will remain undersupplied for several years,” Mr. Gray said. “When it balances out in 2010, oversupply will only be nominal.”

NICKEL

Nickel prices will fall further after peaking this year, while copper will remain high as demand outpaces supply, he said.

China’s use of lower-grade nickel and rising output from new mines will cause prices to fall, Mr. Gray said. The “long-term” price of nickel, which hit a record high this year, will fall to about $13,000 a tonne, still above the five-year average, he said.

Copper prices will remain around $3.40 a pound for “at least five years” as mining companies fail to develop enough large deposits to meet rising demand from China, Mr. Gray said.

PTI reports :

India’s iron ore exports to China has slumped by 26.5 per cent in August to 4.59 million tonnes, lowest monthly level since October last year, as compared to July, continuing the decline after the Centre imposed an export tax in March “Indian iron ore exports to China in August hit their lowest monthly level since October 2006. China’s total August imports were down by 12.8 per cent from July at 29.29 MT, with shipments declining from most major supplying countries,” the Steel Business Briefing (SBB) reported quoting data from China Iron and Steel Association (CISA). The iron ore export to China has declined by 26.5 per cent in August in comparison to July when the country shipped 6.2 mt to its neighbour, SBB said, pointed out that volumes have been steadily dropping since the central Government introduced an export tax in March. During January-August, India exported a total of 56.19 mt to China, a 5 per cent growth as compared to the same period in 2006. Brazil and Australia have outpaced this growth at 27 per cent and 14 per cent respectively, SBB said.

Source : Business Line