Supply concerns an iron challenge
The high-riding commodity is predicted to face headwinds over China holdings in miners’ efforts to repeat surprise performance of 2016
Singapore — Iron ore has a very tough act to follow in 2017. After surging in 2016 in a rally that caught out many investors, the commodity faces a challenge as supply concerns re-emerge, with Vale bringing on the industry’s biggest project and holdings at China’s ports at a record. Seaborne supply is expected to remain strong on shipments from Vale’s new S11D project in Brazil, and as miners look to take advantage of prices, said Tan Hui Heng, a Singapore-based analyst at Marex Spectron. That, coupled with slowing demand, could hurt iron ore, he said, joining banks including Morgan Stanley in expecting a retreat. On Tuesday, futures in China sank to the lowest close in eight weeks. Iron ore soared 81% in 2016 in a year when low-cost supply had been expected to rise further amid tepid consumption, hurting prices. Instead, stimulus in China helped sustain steel output, and that, with speculative interest and record coal prices, fuelled the rally. Better demand and a more restrained a...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.