According to industry analysts on September 22nd that, average price of iron ore in spot market might step up to USD150 per tonne in 2011 from USD 146 per tonne in 2010, as the growth of demand would outpace that of supply.
Mr Felipe Reis senior mining analyst of Santander Research stated that global iron ore demand in 2010 would gain 178.6 million tonnes driven by increased demand in China while iron ore supply by global large producers in 2010 would see an accretion of only 57.6 million tonnes. Top six global iron ore producers yielded a total output of 718 million tonnes in 2009.
He said that global iron ore demand in 2011 would advance by 96.1 million tonnes versus a supply increase of 62 million tonnes. Fueled by new-launched iron ore projects, global iron ore supply in 2012 would embrace a further increase of 90 million tonnes, just outstripping a demand growth of 89.7 million tonnes.
Mr Felipe also forecasted a slight fallback in 2012’s spot iron ore price arriving at USD 127 per tonne in the wake of an overtaking supply growth against market demand growth.