Public CompanyPrices may fall to $70: NMDC
Cash iron ore prices may fall to about $70 a tonne in the “near term” as China, the world’s biggest buyer, cuts purchases, said Rana Som, chairman of NMDC, India’s top producer of the steel making material.
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“This could happen in a few days,” Som said on Tuesday. The forecast is 26 per cent lower than this year’s peak rate of $95 without freight earlier this month, according to Macquarie Securities. China’s stockpiles of iron ore to make steel are at 75 million tonnes, just 0.6 per cent below levels last September, when they rose to the highest since at least 2006. The cash price for Australian iron ore delivered to China slumped 9.3 per cent on August 21 after Chinese steel prices declined.
Ore prices have likely “topped out” this year as steel prices fell, Liberum Capital analysts said on August 17. The Baltic Dry Index, a measure of commodity-shipping costs, fell 27 per cent this month on concern that demand may be slowing.
Iron ore swaps for settlement this month traded at $98.31 a tonne on Monday, according to SGX AsiaClear over-the-counter prices from Singapore Exchange. They indicate prices may drop to $87 by December. Demand in India remains strong even as global sales slide, Som said.