SHANGHAI, Jul 3 (SMM) – SMM expects the average overseas prices of iron ore to hover at highs of $85-95/mt in the second half of 2019 as resumption at Brazilian mining company Vale’s 30 million mt/year capacity is likely to only somewhat ease the global supply tightness.
Rio Tinto on June 22 again lowered its iron ore shipment targets, to 320-330 million mt this year, and this will also support prices.
Tight supplies have bolstered prices of iron ore by 73% this year, to the highest since January 2014, following January’s dam disaster at Vale that suspended 93 million mt of production and a storm in Western Australia that affected mine operation.
Australian authorities expect iron ore prices to average $80/mt this year, and fall to an average $57/mt in 2021, citing recovered supply and lower demand from China.
Australia’s Department of Industry predicted that Chinese steel output, which accounts for half of the global production, has reached its high water mark.
Industrial data showed that Brazilian exports of iron ore in June grew 500,000 mt from January, indicating recovery of supply. Australian exports also jumped to record highs with shipments leaving Port Hedland in Western Australia up more than 20% year on year at the end of June.
On June 22, Vale restarted a third of its capacity, or 30 million mt/year which suspended since January, at its Brucutu mine.