Entering new mining capacities in Australia will cause a drop in iron ore prices - Vale

Vale Brazilian mining company expects the introduction of new production capacities in the second quarter of 2013 in Australia will exert significant pressure on the price of iron ore. However, the head of the iron ore division, Jose Carlos Martins, emphasized that Vale does not allow in his strategic calculations a drop in prices below 110 dollars per ton.

According to the Vale manager, in this quarter around the world, from 30 to 40 million tons of additional capacities for the extraction and processing of iron ore, the lion's share of which falls on the Australian continent, will be introduced. This, of course, will cause sufficiently large fluctuations in the world price, which will occur until the demand absorbs excessive proposal.

The main hope of manufacturers of iron ore raw materials remains China, which showed in the first quarter of this year a good increase in the production of steel and the consumption of key components for its production. The second important to the world consumption of ore by the player Stan, according to Martins, will soon be India, which gradually increases its potential.

The head of the Iron ore division Vale said that since the company's sales in the Chinese market are gradually reduced, the price supply for this region will be reduced.