Iron ore price rise forecast for Australian mining companies

Iron ore price rise forecast for Australian mining companies

Australian mining companies upbeat about spot iron ore prices hitting $82 a tonne by mid-year

Good news at least for Australian mining companies in the iron ore business. Declining spot prices for iron ore have made Australian iron ore miners nervous.

However, some good news around iron ore has been coming out of the offices of world-renowned analyst Morgan Stanley, who have made a bold statement that ‘spot iron ore prices should hit $82 by mid-year’.

This is due to seasonal restocking by China`s steel mills and the end of the Australian-led iron ore supply surge of 2014. That’s good news for some of Australia’s biggest mining companies with massive iron ore projects in the WA Pilbara and elsewhere. The report did go on to say that by the end of 2015 the spot price could drop back to around $77 a tonne.

“Despite the continued onslaught of new, low-cost supply entering the seaborne market, we see the seasonal trade, moderating supply growth ““ including cuts and the promise of greater demand in China, following on from recent infrastructure announcements ““ as all contributing to generally greater trade flows and higher price levels,”¯ he says.

“As of December 2014, Morgan Stanley estimate that more than 150 million tonnes per year of iron ore capacity has
been cut, representing about 10 percent of estimated seaborne and China production capability in 2014.

He also noted the announcements by China`s central government to move infrastructure investment targets forward to kick-start medium-term economic growth in the region. This is a small positive indicator for iron ore as the major driver of future iron ore pricing will be the health of China`s property sector.

How does China’s housing sector affect Australian mining jobs in iron ore mines?

Find the answer to that question and a whole lot more in the weekly edition of iMINCO Project News. Get the latest iron ore info on FIFO jobs with the big mining companies.

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