Some of the leading market analysts and major mining corporations of the world have predicted that Iron Ore prices could correct sharply by the end of this year, raising concerns among miners around the globe.
The main reason attributed for this coming drop in iron ore prices is the slowing steel demand from China which has been the biggest importer over the last few years. This coupled with fresh iron-ore supplies from newly expanded mining operations around the globe could keep iron ore prices under pressure through out the fiscal year 2013-14
Iron ore prices had touched a peak of US$159 per ton in February 2013 and have now corrected to touch US$125 per ton towards the end of March 2013. Some steel analysts and mining corporations are predicting that Iron Ore prices could fall to a low of US$90 per ton over the next five years.
Iron Ore Oversupply Outlook – Impact on Steel Industry
The price of iron ore touched stratospheric highs during the years 2010 to mid-2012, when it ranged from a low of US$125 a tonne to a high of US$200 a tonne.
Earlier this month, Goldman Sachs released a research report lowering its 2015 price forecast to around $80 a tonne, as the demand from China slows. This slowdown has been attributed to the growing use of scrap in steel production and increased investment in the creation of new domestic mines.
Many of the big iron ore mining corporations like Rio Tinto,BHP Billiton and Fortescue Metals Group have invested in opening new iron ore mines which could boost iron ore production dramatically by 2015 further depressing prices.
The ban on Iron ore exports from India is partly responsible for some of the increase in prices early this year but many analysts expect supply to resume within the next few months which could impact prices.