Iron ore production will grow

According to a report by Liberum Capital, next year the production of iron ore in the largest corporations in the world will increase by 50 million tons. According to banks, the price may fall to $ 45 per ton.

The growth in production will also have those companies that complain about overproduction and low prices, Rio Tinto and Vale. Production is expected to increase from 636.3 million tonnes in the first half of this year to 686 million tonnes in the first six months of next year. Growth will be even greater throughout 2017.

Vale will add 20 million tonnes and BHP Billiton's 14 million tonnes, according to the Liberum report. Anglo will add 6 million tonnes and Rio Tinto and Sino Iron 5 million tonnes.

Vale will launch the S11D project later this year. All in all, this will significantly boost the company's production. Roy Hill's Australian company continues to accelerate and expand into new markets. Next year, it is expected to reach a target production capacity of 55 million tonnes per year.

According to analysts, this should lead to further price reductions. Most banks and analytical firms predict that iron ore prices will remain above $ 50 per tonne. Citygroup predicts that the average iron ore price will fall to $ 45 next year. Morgan Stanley even claims that the ore price could fall to $ 40 at the end of the year.

According to the AME, price increases can only be expected in 2019, when low prices will throw the highest-cost producers overboard and thus lead to production cuts again.