[Ferro-Alloys.com] Prices for iron ore should be "quite a bit lower next year" while met coal could rise and steel pricing will moderate but not collapse, Tracy Liao, research analyst, Citi, told delegates at the London Metal Exchange's ferrous focus session in London last Thursday.
Average prices for 62% Fe iron ore fines delivered to China may fall to $80/mt in 2020, from $94/mt in 2019, before sliding to $60/mt in 2021 and 2022, Liao said. This would not be far off the 2018 average price at $69/mt, before this year's disruptions.
"Iron ore had a major year," in 2019, due to production disruptions at Brazil's Vale and as a consequence of Australian cyclones that led to a "major dip" in shipping, she said. Now, the industry is "mainly back on track;" of the 90 million mt/year which Vale said it would lose following its January tailings dam accident, 30 million to 40 million mt/year has now come back. However, weather-related disruptions may continue to play out, she said.
"The trend is for prices to gradually dip down but the path will be really bumpy," Liao said.
Iron ore lump and pellet premiums are under pressure due to ample supply and weak steelmaking margins, with price differentials between 65%, 62% and 58% Fe fines also much lower than 2017/2018 levels, she said. (S&P Global Platts)
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