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Waning China demand to cut 20pc off iron ore price but it’s better news for copper

  • Tuesday, July 3, 2018
  • Source:ferro-alloys.com

  • Keywords:China demand, price ,cut
[Fellow]Waning China demand to cut 20pc off iron ore price but it’s better news for copper

[ferro-alloys.com]Iron ore prices are expected to fall by more than one-fifth over the next two years as demand from China’s steel mills slips, while domestic and Brazilian output climbs, a new Federal Government report says.

In its quarterly Resources and Energy report, Australia’s Department of Industry said iron ore prices on a free-on-board (FOB) Australia basis are expected to slip to an average of $US51 a tonne in 2020, a drop of more than 21 per cent from Monday’s levels of $US65 a tonne, according to Metal Bulletin prices.

The report, which covers a range of resources, said quarterly prices will fall as China’s overall iron ore imports slow 0.6 per cent a year to 1.07 billion tonnes in 2020, with steel production easing in the world’s biggest consumer of metals.

A positive outlook for industrial production and a seasonal rebound in construction activity in China’s spring will shore up prices to average $US59 a tonne FOB Australia this year, the government report said.

On the demand side, growth in global industrial production and manufacturing appears to have peaked in the first half of this year, the report said, suggesting resources prices may generally have set their highs for the cycle.

However, prices across the sector are likely to follow their own fundamentals, with supply-constrained copper prices still likely to advance. Australia is the world’s third-largest exporter of copper ores and concentrates.

Global copper prices are expected to climb to an average of $US7910 a tonne by 2020, up 22 per cent from an average of $US6462 this year, as slower growth in mine supply falls short of rising demand from energy infrastructure.

New zinc mines are expected to squeeze prices to around $US2625 average by 2020, down from $US3155 this year.

  • [Editor:王可]

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