The global iron ore market is strong and prices are expected to rise over the next few years, the Euroforum iron ore conference in Berlin was told yesterday. ”Market fundamentals are very strong. I am convinced iron ore price rises will continue for a few more years, and when they do fall it will not be exaggerated,” Magnus Ericsson, chairman of the Raw Materials Group, told attendees.
His views were echoed by other speakers who said the current fall in prices was down to seasonal factors, such as the post-Olympic slowdown in China, the financial crisis in Europe and the US, and the monsoon season in India. Structural drivers, they said, remain sound.
“Recent steel price weakness is determined by non-structural factors such as seasonality and financial problems,” said Renato Neves, global iron ore director at Brazil’s Vale. ”Urbanisation should contribute to the development of the construction sector in emerging markets, which will support (steel and ore) prices. Chinese iron ore imports are rising, and the recent slowdown is seasonal,” he continued.
Alan Smith, vice president of Atlantic marketing at Rio Tinto, corroborated this view, saying the drivers of steel consumption and production, particularly Chinese growth and urbanisation, remain strong. “The China story has a long time to run, strong growth for another decade. During this time India will become a major driver of steel demand.”
One speaker, David Tucker of Hatch Beddows consulting, told Steel Business Briefing, however, that he believes iron ore supply is catching up with demand.
Steel Business Briefing Oct 1, 2008