IRON ORE PRICE ON SKID ROW

Finweek English Edition - - TECHNOLOGY -

Vivek Tulpule, Rio Tinto’s chief econ­o­mist, sug­gested that the price of iron ore could drop from $150 to $100 a ton over the next 12-18 months with some sug­gest­ing $75 is pos­si­ble. The prob­lem is twofold. First, Chi­nese de­mand is not likely to in­crease much, while the f lip­side of the equa­tion is what will hurt sup­ply. The is­sue with com­modi­ties is that as prices rise, ev­ery­body wants to get a slice of the ac­tion so new sup­ply is brought on stream and we’ve been see­ing lots of new iron-ore mines be­ing launched with even more coming. So with de­mand f lat and sup­ply in­creas­ing, the hey­days of mas­sive mar­gins have likely passed for iron ore min­ers.

Rio Tinto Plc

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