Iron Ore Slump Seen by Ex-Vale’s Zhu Shuttering China Mines

Surging supplies of seaborne iron ore will trigger the closure of high-cost output in China, according to Michael Zhu, former global sales director at Vale SA, the world’s largest producer of the steel-making raw material.

“The first players to be out of the market will be the domestic producers who have higher costs,” said Zhu, president of Hong Kong-based trader Millennia Resources Ltd. Mainland mines will have to reduce output or shut if prices remain below $100 for another month or two, he said in an interview, forecasting prices may drop as low as $80 a ton this year.