By Paul Ploumis (ScrapMonster Author)
November 27, 2015 05:18:57 AM
According to Fitch Ratings, iron ore prices are unlikely to recover in the upcoming years, on the back of new supplies coming online during 2016 and 2017Iron ore prices to average $50 per ton through 2015 and 2016: Fitch
SEATTLE (Scrap Monster): According to Fitch Ratings, iron ore prices are unlikely to recover in the upcoming years, on the back of new supplies coming online during 2016 and 2017. The agency forecasts prices to average around $50 per ton through 2015 and 2016. It anticipates more than 145 million metric tons of new supply to be brought online in the coming years.

Meantime, iron ore prices hit nearly decade lows on Tuesday, on fears that Chinese steel mills may cut back production, thereby hurting the demand for the steelmaking raw material. At the same time, large scale miners have announced that they plan to boost mine production. According to market participants, the global iron ore market is currently at a huge surplus, as demand from Chinese steel sector has weakened considerably during the past several months. Incidentally, China is the largest consumer of iron ore.

According to Fitch, lesser number of high-cost mines was closed than anticipated, despite sharp fall in iron ore prices since the beginning of 2014. The global demand, especially Chinese demand, has weakened during the year. The demand is expected to remain muted during 2016 as well.