Iron ore will get cheaper - a special report UBS

Iron ore prices will begin to fall already in this quarter due to a seasonal reduction in demand, UBS analysts write. In the future, with an increase in the amount of supply, the cost of iron ore raw materials will continue to decrease.

"The risks of a seasonal rollback of production of steel caused correction of prices for ore, we give a forecast of a slight drop in value," the report published yesterday said. The average prices for iron ore raw materials are expected at the level of 123 US dollars, in 2014 - $ 106 and in 2015 - 96 US dollars per ton ore with an iron content of more than 62 percent.

Nevertheless, until that moment, ore prices were in an upward trend. Record low reserves of metallurgical raw materials in China pushed manufacturers to increase capacities. The host of the Rio Tinto mining company announced a new ore mining record in the third quarter and ahead of the schedule for the construction of new capacities in Pilbar (Australia) with the commissioning of which, local careers will issue 360 ​​million tons of raw materials a year instead of 290 million tons in 2012.

Considering the risks of iron ore overproduction, UBS notes that its excessive proposal in the world market in 2014 will be more than 150 million tons after 24 million tons in 2013. It is for this reason that analysts say and a smooth reduction in prices will occur.

Today, iron ore in the Chinese port of Tianjin costs $ 133.60, which is the highest rate of this month and this figure is 21 percent higher than the annual minimum recorded on May 31, 2013.