London based metals and minerals research house Roskill Information Services expects prices to remain above $120 per tonne for 63.5 percent Fe content Indian iron ore fines until the end of 2014.
The research agency also expects a restocking phase to push prices towards $135 per tonne during 2013, although it does not anticipate large fluctuations.
In 2012, a destocking phase among steel producers depressed demand for iron ore. However, industry experts feel that a partial recovery appears likely, as the construction sector in China and increased infrastructure spending will support growth in demand.
However, uncertainty over the Eurozone affects the iron ore industry through its effect on demand, as well as on the reduced availability and higher cost of capital.
Revisions of figures on Chinese growth targets and performance are likely to result in further short term peaks and troughs, although much of the adjustment to a more realistic outlook has already taken place albeit some rebound from excessive and unwarranted pessimism may be expected, Roskill said in a report.
Other risk factors include growing resource nationalism, particularly in Africa, highly unpredictable energy costs, rising labor costs, and the fate of the Indian mining industry following the mining bans in Goa and Karnataka states, the report said.
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