clowns

they are probably hiding under a big lump of iron ore by now...

news just out on DJ


SYDNEY (Dow Jones)--Contract iron ore prices are set to rise by 50% to US$85.60 a dry metric ton for the 2010-11 period after a much faster-than-expected recovery in iron ore and steel markets, Merrill Lynch said in a note dated Wednesday.

Merrill's upgrade--from its previous forecast of a rise of 15%--is, so far, the most aggressive of the investment banks. While many other banks have recently hiked expectations, their expected forecasts are centering more on a 20%-30% price rise.

UBS, for instance, is currently forecasting a 20% increase.

Major iron ore miners Vale S.A. (VALE), BHP Billiton Ltd. (BHP) and Rio Tinto Plc (RTP) are yet to settle annual benchmark contract prices that come into effect at the start of the Japanese financial year on April 1 with major steel mills.

"Just as in 2005 and in 2008 when prices went up 71% and 65%, respectively, we expect iron ore prices to significantly surprise on the upside," said Merrill Lynch.

For the 2009-10 period, benchmark prices were cut 33%.

Spot market prices are currently trading about 80% above contract prices, indicating tight supply.



-By Elisabeth Behrmann, Dow Jones Newswires;

61-2-8272-4689 [email protected]




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(END) Dow Jones Newswires

January 13, 2010 21:35 ET (02:35 GMT)

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