Melbourne (Platts)--12Dec2012/535 am EST/1035 GMT
The Australian government's commodities forecasting agency in its December quarter outlook report released Wednesday predicted iron ore prices would average at $106/mt FOB next year, up from an earlier prediction, but its outlook remains far more pessimistic than that of the country's iron ore producers. The Canberra-based Bureau of Resources & Energy Economics in its September quarter report had forecast that iron ore prices would average $101/mt FOB in calendar year 2013. At that time, prices were extremely weak but they have since recovered. BREE said that iron ore prices in 2012 would average $128/mt FOB, indicating next year's expected $106/mt FOB will be a 17.3% drop year on year. Most iron ore miners in Australia said they expected prices to stay close to $120/mt CFR in 2013, as at this level Chinese iron ore producers are able to stay profitable. Freight rates between Western Australia and northern China are around $7.30/mt currently. Article continues below...Request a free trial of: Platts SBB Steel Markets DailyPlatts SBB Steel Markets Daily provides transparent daily and weekly assessments of iron ore, coking coal, coke, ferrous scrap and ferroalloys prices, plus insightful analysis and commentary on the day's market activities.
The Australian government's commodities forecasting agency in its December quarter outlook report released Wednesday predicted iron ore prices would average at $106/mt FOB next year, up from an earlier prediction, but its outlook remains far more pessimistic than that of the country's iron ore producers. The Canberra-based Bureau of Resources & Energy Economics in its September quarter report had forecast that iron ore prices would average $101/mt FOB in calendar year 2013. At that time, prices were extremely weak but they have since recovered. BREE said that iron ore prices in 2012 would average $128/mt FOB, indicating next year's expected $106/mt FOB will be a 17.3% drop year on year. Most iron ore miners in Australia said they expected prices to stay close to $120/mt CFR in 2013, as at this level Chinese iron ore producers are able to stay profitable. Freight rates between Western Australia and northern China are around $7.30/mt currently.
Article continues below...
Platts SBB Steel Markets Daily provides transparent daily and weekly assessments of iron ore, coking coal, coke, ferrous scrap and ferroalloys prices, plus insightful analysis and commentary on the day's market activities.
BREE predicted that iron ore prices would weaken further over the first half of 2013 from average December quarter levels of $108/mt FOB on slower Chinese steel consumption growth, before recovering towards the end of the year. The Canberra-based organization is in accord with the miners in expecting Chinese steel consumption to rise on the back of stimulus spending by the new leadership in Beijing. Miners such as Fortescue Metals Group and Atlas Iron said they expected stimulus measures to start taking effect from mid-next year and the price of $120/mt CFR was a realistic medium-term level. The forecaster said it expected total global iron ore exports to reach 1.2 billion mt in 2013, from 1.1 billion mt this year, with the lion's share of new exports coming from Australia. It said Brazil's exports would remain flat next year at 327 million mt, while Australia's would rise 13% to 543 million mt from an expected 481 million mt this year. BREE sees Indian exports falling to just 38 million mt in 2013, down 25% from 51 million mt in 2012.--Paul Bartholomew, paul_bartholomew@platts.com--Edited by Haripriya Banerjee, haripriya_banerjee@platts.com
Tweet
@PlattsMetals on Twitter @PlattsCoal on Twitter