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According to the prediction of the World Bank, the iron ore prices are likely to record the largest drops among all metals this year. The institution pointed out that the low-cost supplies have continued to be more than demands. The World Bank has adjusted down the expected iron ore prices before 2020.
The World Bank points out in its quarterly outlook that the demand has been close to the top level. In 2016 the average price of iron ore is expected to be US$ 42 per ton, down by 25% from the level of US$ 55.80 last year. In comparison, the nickel price as well as the copper price is expected to decline 16%. In October last year, the institution estimated the iron ore price at US$ 59.50 in 2016.
The World Bank has also cut down its predicted iron ore price by 28% to US$ 44.10 per ton in 2017, and estimated the iron ore price to stay below the level of US $50 before 2019, and then rise to US$51 at the end of 2019.
An analyst with China Merchants Futures expected that because the supplies of low-cost iron ore have increased and the productions of the steel mills nationwide are limited during the long holiday of the Spring Festival, before the holiday, the iron ore stored at the ports in China is likely to exceed 100 million tonnes.
The Chinese Customs announced last week that in December last year, China's iron ore imports increased by 17% month on month to a record 96.27 million tons, with the upward momentum in November extended.
Some analyst said that the domestic steel works usually shrink the productions during the Spring Festival holiday as the construction industry will be in low activity with the workers taking their holidays. With the iron ore demands to be boosted by more steel works resuming production after the holiday, the inventories at the ports are expected to decline.
