Capital Economics Sees a Wild Ride for Iron Ore as $20s Loom
- Price may recover to end 2016 above $50 a ton, Bain predicts
- Higher-cost mines in China will close, Capital Economics says
A mine worker positions a hose used in the drilling operation inside an underground iron ore mine. Iron ore has been pummeled yet again over 2015 as the world’s largest miners including Rio Tinto Group and BHP Billiton Ltd. in Australia and Brazil’s Vale SA raised low-cost output while demand stalled in China.
Photographer: Casper Hedberg/BloombergIron ore may be in for a roller-coaster ride next year as prices swoon into the $20s, then rally to end higher after three annual losses, according to Capital Economics Ltd.
The ore may initially drop as low-cost supplies rise further, helping the top producers to expand market share, according to Caroline Bain, the forecaster’s London-based senior commodities economist, who correctly predicted in June that prices would sink into the $30s this half.