shortfall 08

Iron ore shortfall 'to repeat in 2008'
January 18, 2008 - 8:00PM

Iron ore supply fell short last year, analysts believe.

Credit Suisse's theoretical iron ore supply and demand model suggests that 2007 ended short by about 25 million tonnes (Mt), which is almost the output of the world's fourth largest iron ore exporter.

Seaborne trade last year totalled about 790Mt.

"We are estimating another deficit of about 20-25Mt, against seaborne trade of about 870Mt," Credit Suisse said.

The analyst said the last time the iron ore market was as tight was in 2004/05.

"We are revising our iron ore price curve as a result of continued tightness of iron ore markets and rising bullishness among suppliers.

"We are raising our forecast (price rise) for 2008 to 55 per cent, up from 35 per cent.

"We are also raising out 2009 forecast to 20 per cent, up from 10 per cent, and maintain our long term price of $US50 per tonne."

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