Iron ore production and supply from Vale, top Iron ore producer in the world, will increase by 2020. Iron ore prices may increase owing to increase in demand.
Iron ore prices jumped to a three-month high in China on 3 Dec, 2013 because of the continuous growth in constructions. The benchmark CFR import price of Fe 62 grade Iron ore fines at China’s Tianjin port also increased by 1 per cent to USD 138.20/MT. The similar growth level was achieved earlier on first week of Sept, 2013.
China’s official Purchasing Managers’ Index pointed in general towards slow economic activity of the province. The sub-index for construction was supported by the property market. According to the China Federation of Logistics and Purchasing, a figure above 50 represents expansion and the building index was noted to be 63.5 from earlier 62. The Steel industry index on the other hand bounced back to 49 in Nov, 2013 from 47.5 in Oct, 2013.
Steel activity remained sluggish during last month in the province. Export orders for the country’s Steel makers jumped to 56 from 49.2 in Oct, 2013.
China purchases around 70 per cent of the world’s seaborne Iron ore trade, which is expected to reach around 1.1 billion MT of Steelmaking in 2013. Shipments from world’s largest exporters Brazil, Australia and South Africa have been covering up the domestic supply. Thus imports in China recorded a high growth of 74.6 MnT in Oct, 2013.
Chinese Iron ore miners were facing problems with low-grade material and high prices of the material. Domestic supply is also likely to reduce after Beijing has imposed strict environmental standard rules for the highly fragmented industry since Nov, 2013.
Vale, the world’s largest producer of Iron ore says that supplies of the raw material are likely to increase in near future. One third of the additional Iron ore production in 2020 will be omitting the difficulties caused because of the closed and un-operational mines.