Iron ore will decrease to $ 120 per ton

The stability of iron ore prices in recent months has been unexpected for a number of investors and analysts. However, analysts say that prices will nevertheless decrease in 2014 amid a fall in demand by the largest world manufacturers and increase the supply of iron ore from the main miners.

Iron ore, a key steeling ingredient, is currently sold at a price of 139.40 dollars per ton, compared with an average price of $ 132.60 per ton in October, which is much higher than the minimum of June. Chinese Iron ore imports sets new records in July, September and November, in the last of which it amounted to 77.8 million tons, pointing to the rising demand trend. However, according to analysts, price increases reflects a short period of replenishment of reserves by Chinese factories for steel production.

According to the Australian Financial Review, the Chinese fraction of production steel fell compared to the rest of the world in October. Repressions from the Chinese authorities in relation to its steel -fabric potential will negatively affect the demand of iron ore.

At the same time, the main miners of the iron ore of Australia, including BHP Billiton, Rio Tinto and Fortescue Metals Group, along with other heavyweights of the world, including Vale, increase their production volumes, which, in combination with a decrease in demand, will push the prices down. By the end of 2014, as I believe NAB and CIMB analysts, the price will fall to about $ 120 per ton.