Iron ore prices could spike 35%By Purchasing Staff Purchasing...

Iron ore prices could spike 35%
By Purchasing Staff
Purchasing
August 29, 2007



Iron ore companies going for a big run on the back of this news.......a possible 35% price rise on a UMC operation of just 1MTPA would generate about $10 million EXTRA profit......thats over and over profits generated at current iron ore prices (on 1MTPA)


http://www.purchasing.com/article/CA6472575.html

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A new report from RBC Capital Markets says that iron ore prices could rise as much as 35% in the next year due to booming demand from steelmaking regions in Asia. “Demand, particularly from China, has continued unabated, while supply from almost every producer remains constrained,” the RBC analysts said in the report, which was reported by Bloomberg. According to the Bloomberg report, RBC's forecast is on the high end of similar revisions by brokerages in the past three months. UBS AG in July raised its iron ore price forecasts to a 25% gain in 2008, up from 10%, while Goldman Sachs JBWere on Aug. 24 raised its forecasts to a 30% gain, from 9%.

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In July, Purchasing.com reported that increased Chinese iron ore demand could trigger a shortage.

Chinese iron ore demand could trigger a shortage
By Staff
Purchasing
July 14, 2007

World crude steel production increased by almost 9 % to 1.2-billion tons so global iron ore production grew by 12% in 2006 to 1.5-billion metric tons, according to the United Nations Conference on Trade and Development (UNCTAD) in its annual iron-ore market review. Australia was the largest exporter in 2006 while China was the world's largest importer, accounting for 43% of global iron-ore consumption. The high pace of growth has continued in the first months of 2007, UNCTAD says.

In fact, China has increased its voracious appetite for iron ore so far this year, increasing imports at a pace that could lead to shortages later in 2007 if maintained, according to the CFO of Brazilian miner CVRD.

"China continues to import iron ore and other metals at an accelerated rate," CVRD's financial chief Fabio Barbosa comments during a presentation to Sao Paulo's Association of Analysts and Capital Markets Investment Professionals.

Through April, China imported 133.6 million metric tons of the key steelmaking raw material, which projects to an annual rate of 400 million metric tons in 2007, Barbosa says, noting that CVRD expects to ship 100 million metric tons to China this year, up from 77.873 million metric tons in 2006.