According to a study by Chile's state copper comission Cochilco, iron ore prices will fall to an average of USD 120 per tonne in 2013 before rising again to USD 125 per tonne in 2014. The commission is estimating an average price of USD 125 per tonne for this year.
The price of iron ore fell 10% in 2012 due to a series of factors that resulted in a market surplus. These include the larger than expected slowdown in the Chinese economy, the financial crisis in Europe that reduced demand for products and an increase in output as projects entered into production.
According to Cochilco, next year will not be very different and the global surplus will continue into 2014.
Demand from China will also remain subdued, rising just 2% in 2013.
HRC steel prices registered a fall of 14% in 2012 and the commission is forecasting an average price of USD 651 per tonne for the year.
China is the main consumer absorbing 44% and therefore the slowdown in the Asian country affected demand and consequently prices during the year.
According to the report, the steel market will continue to be in surplus in 2013, although smaller than in 2012. The market is expected to enter into balance in 2014.
Cochilco is forecasting a price of USD 693 per tonne for HRC steel to the Asian market in 2013 rising to USD 716 per tonne in 2014.
Despite the slowdown in demand from China and India, Cochilco believes that steel consumption in these countries will continue to grow in 2012-14, but at a slower pace than in the past.
Source:
http://www.steelguru.com/raw_material_news/Iron_ore_and_steel_prices_to_fall_in_2013_Cochilco/296833.html
