Iron ore will decrease in the long run due to the decrease in demand and increased supply. International credit rating agency Fitch has increased its iron ore price from $110/t to $125/t this year. However, this institute expects the price of iron ore to fall to the limit of $50 per tonne in the long run.
Although iron ore production tends to recover this year after decreasing by more than 50% in the second half of 2022, this rate increase cannot be considered sustainable in the long run. According to Fitch, the changes in the real estate market along with the zero corona policy in China supported the recovery of the iron ore price in the short term.
At the same time, according to the latest report of the Australian government, the probability of a 0.9 percent annual decrease in iron ore production from this country has been reported in the last 5 years. It will be caused by the decreasing demand in production and the possibility of preventing the decrease in prices in the market.
In Africa, the Guinean government has recently resumed development of the massive Simandu mine, and the market is expected to supply 150 million tons of product annually from this mine.
Brazil is expected to increase its annual average production by 6% by 2028.
The global iron ore supply is projected to grow at an average annual rate of 3.1% through 2028. In this case, the increase in the supply of iron ore and the decrease in the demand for 5 years will create price pressure on the market.
Despite the upward trend in prices in Iran, the price of iron ore has decreased in the past week. Price changes in Chinese ports caused this decrease. 66% Iranian iron concentrate as FOB, the price index decreased -1.7% to $117/ton. A price of $97 was given for delivery at the mine, including $20 shipping from mine to FOB.
The export price of iron concentrate was 11.5% lower compared to the commodity exchange ($109.7 (3,128 million Tumen)) and no exports were realized.
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