Iron Ore Price to Rebound as China Seeks Cheaper Imports
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A plunge in iron ore prices and shipping costs means it’s cheaper for Chinese steel mills to buy the material from Brazil more than 8,000 nautical miles away than to buy the lower-grade ore being dug in their own backyard.
China’s iron ore output had the steepest decline in July in four years, signaling the world’s largest metals consumer is poised to boost purchases from producers such as Brazil’s Vale SA and Rio Tinto Group. Stronger demand may push iron ore higher, with the spot price set to gain as much as 41 percent in the fourth quarter after touching a near-three-year low today, according to estimates compiled by Bloomberg.