Kumba CEO predicts iron ore to fall again after recent recovery
Kumba Iron Ore CEO Themba Mkhwanazi correctly predicted in February that the company’s commodity prices would plunge by 40%. After a recent recovery, he expects them to fall again. Iron ore has rallied for the past six weeks, reaching $70 a tonne on the back of a steel-making recovery in China, the largest consumer. Prices will likely average $55 to $60 a tonne in the second half of this year, Mkhwanazi said in an interview on Tuesday. "When you look at fundamentals — port stocks, activity around steel production — it’s very supportive of a price range of $55 to $60 a tonne," he said. A resurgence in steel-making in China, helped by the seasonal mid-year increase in production, has sparked a 30% rally in iron ore since June 13, benefiting global low-cost miners such as Australia’s Rio Tinto Group and BHP Billiton, and Brazil’s Vale. But the higher prices have also prompted producers in China and India to increase supply, said Mkhwanazi. "We’re likely to see some moderation because t...
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