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Iron Ore Contract Price May Rise as Much as 50%, Nomura Says
Jan 12,2010 09:06CST
industry news
Source:SMM

Jan. 11 (Bloomberg) -- The iron ore contract price is set to increase 40 percent to 50 percent in 2010 after a surge in the cost of the steelmaking ingredient for immediate delivery on the so-called spot market, Nomura Holdings Inc. said.

"Contracts are unlikely to be settled at very large discounts to the spot price, otherwise ore would simply be sold into the spot market," Nomura analyst Paul Cliff wrote in a note today. The bank said trade in the spot market has grown to 400 million metric tons a year from 100 million tons in 2003.

JPMorgan Cazenove raised its forecast for the iron ore contract price last week, saying it will rise 40 percent, compared with a previous estimate of a 20 percent gain.

 

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