Iron ore market steels itself for a tough year
Supply concerns, coupled with slowing demand are seen as the challenges which could hurt iron ore in 2017
Singapore — Iron ore has a tough act to follow in 2017. After surging last year in a rally that caught out many investors, the commodity faces a challenge as supply concerns re-emerge, with Vale SA 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 newly completed S11D project in Brazil, and as miners look to take advantage of current prices, according to Tan Hui Heng, a Singapore-based analyst at Marex Spectron. That, coupled with slowing demand, may 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, along with speculative interest and record coal prices, fuelled the rally. Bette...
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