iron ore price expects to rise This should be good for MMX which...

iron ore price expects to rise This should be good for MMX which has been consolidating around the previous break out level as expected it would.


Iron Ore Prices May Rise 20% on Chinese Demand, Citigroup Says
Feb. 23 (Bloomberg) -- Prices of iron ore, a steelmaking raw material, may rise as much as 20 percent this year to another record as global supplies continue to lag demand led by China and shipping costs fall, Citigroup Inc. said.

Falling shipping costs have reduced prices that steelmakers in China pay for the ore, Citigroup commodity analyst Alan Heap said today. His price prediction is higher than the median 12 percent estimate of analysts surveyed by Bloomberg in November.

``It seems to us a 20 percent increase is absolutely achievable,'' Heap said at an Australian Journal of Mining conference in Perth, Australia. ``It would be quite possible for (the miners) to say to the Chinese, we would deliver iron ore to you at the same prices you got in 2005 given that freight rates have come down by half.''

Cia. Vale do Rio Doce, BHP Billiton and Rio Tinto Group, who account for about three quarters of global trade in iron ore, are in talks with steelmakers to set benchmark iron ore prices from this April. Prices last year jumped 71.5 percent to a record.

Chinese imports of iron ore will rise by 16 percent this year to 320 million metric tons, a slower pace of increase than previous years, Heap said.

The pace of demand for steel for construction in China is slowing, though is expected to pick up in the next few years, he said. Growth in Chinese iron ore imports will then rise to between 55 million and 60 million tons a year, compared with the expected 45 million tons this year, he said.