Seaborne iron ore prices are expected to weaken in 2018 amid ample supply, with the decline set to continue over a longer term, according to the Australian government's Department of Industry, Innovation & Energy.
China's ongoing steel capacity reduction plans, which have the opposing effect on prices for the steelmaking raw material, will continue to create price volatility, the department said in its Resources & Energy Quarterly report released on Monday April 9. The department expects prices for 62% Fe iron ore to average $61.80 per tonne fob Australia this year, compared with last year's $65.80 per tonne. In the short term, the department expects Chinese demand to remain steady based on the recent data on industrial production and fixed-asset investment and a seasonal rebound in construction activity in the spring months. Metal Bulletin's 62% Fe Iron Ore Index stood at $63.57 per tonne cfr China last Friday, down from $79.39 per tonne cfr on March 1, the highest that the index has been this...