IRON ORE PRICE ON SKID ROW
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