Iron ore will be well-supported at more than $100 a ton this year on sustained demand from China, the largest user of the steel-making raw material, according to CLSA Ltd., which said the longer-term outlook is more bearish.
Ore may trade between $110 to $120 in 2013 amid below-average inventories, Ian Roper, commodities strategist, told a conference in Singapore today. Ore with 62 percent iron content at China’s Tianjin port was at $130.20 a ton yesterday, and last traded below $100 in September, The Steel Index data show.
The commodity has lost 10 percent this year, nearing bear-market territory, amid forecasts for increased global seaborne supplies, especially from Australia in the second half. Demand is still there, and while global supply growth is coming, it perhaps won’t be as great as some people feared, Roper said.
“My long-term view, I’m still structurally very bearish on the iron ore outlook,” said Roper, who’s based in Shanghai. “Nearer term, more neutral, not quite so bearish. I don’t think it’s too much of a disaster this year.”
Imported ore at Tianjin has lost 18 percent since peaking at $158.90 on Feb. 20, nearing the 20 percent decline that some investors use to define a bear market. Last September, the raw material plunged to $86.70 as China’s economy slowed for seven consecutive quarters and mills destocked.
To contact the reporter on this story: Glenys Sim in Singapore at firstname.lastname@example.org
To contact the editor responsible for this story: James Poole at email@example.com