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Ansteel chairman Zhang Xiaogang told London’s Financial Times that the average iron ore price for 2013 would be somewhere between $US110 and $US120 per tonne.

While that prediction is similar to the $US111 per tonne the commodity was fetching on Monday, the price has averaged much higher at $US140 per tonne when measured since January 1.

Mr Zhang’s comments therefore imply that price falls are ahead for the commodity, which ranks as Australia’s most lucrative export.

“We have to prepare for a long-term struggle,” said Mr Zhang, in reference to the profitability of the Chinese steel sector.

“Some people will collapse during this war of attrition, if their cash flow dries up, or if they can’t make any money at all.”

While Mr Zhang’s rhetoric might sound bearish, his prediction that iron ore will average between $US110 and $US120 per tonne in 2013 merely puts him in line with the forecasts made by iron ore exporters and government agencies in Australia.


Read more: http://www.smh.com.au/business/china-warns-of-weak-iron-ore-prices-20130610-2nzut.html#ixzz2VneC2iLB