Capetown (Platts)--4Feb2013/754 am EST/1254 GMT

A downtrend in spot iron ore prices is to be expected in 2013 due to supply outweighing demand, said Ric Deverell, Head of Commodities Research at Credit Suisse, at an industry conference Monday.

"Iron ore prices will go down this year mostly because of supply. You've got a lot more supply than demand," Deverell said.

He added that spot iron ore prices would probably stay around the $100/dmt [CFR China] level this year. Platts assessed the 62% Fe IODEX at $155/dmt CFR North China Monday, up a dollar from the previous Friday.

"You're just not going to see the $180/dmt [CFR China] levels that we once saw before," Deverell said.

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With India, once a major exporter of iron ore, out of the game due to mining bans in western India and a hike in export duties to 30% from 20% on December 30, 2011, Deverell said Australian mines were the main driver of global growth in iron ore supply by about 8% year on year.

Currently, restocking activity of spot iron ore in China, the biggest net importer of iron ore in the world, is at a high due to heavy destocking in the second half of 2012. The widespread destocking of iron ore over that period took place mainly as Chinese steel production was cut to minimize losses in an extremely weak market.

While current restocking of the steelmaking raw material by steel mills in China was supporting demand, Deverell said it was doubtful that this could overcome the iron ore supply overhang.

--Celestyn Wong, celestyn_wong@platts.com
--Edited by Martin O'Rourke, martin_orourke@platts.com

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