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PrintChilean iron and steel producer CAP expects iron ore prices to remain firm into next year and possibly creep higher.
"We believe that the price of iron ore will hold steady or rise slightly," Chairman Roberto de Andraca said Monday on the sidelines of the Latin American Steel Association's annual congress in Santiago.
Iron ore prices have recovered to around $120/mt after slipping to lows of around $80/mt earlier this year as demand from China slipped as the country's economy slowed.
But Chile's mining industry remains confident that following the transfer of power to a new generation of Communist Party leaders, China's economy will pick up speed again, supporting commodity prices.
"The information we have suggests that towards the end of this year or the beginning of next year the Chinese economy will begin to grow at a faster rate ... and this will have a positive impact on markets like ours," Chile's mines minister Hernan de Solminihac said after inaugurating the meeting.
De Andreca agreed.
"We are among those who believe that China will be a stable client, we produce ore which interests them," the executive said, noting that CAP's current output of 12 million mt/year represents 1% of China's annual consumption.
CAP, Chile's largest producer of iron ore and steel, is in the midst of a major expansion program for iron ore operations, in which Japan's Mitsubishi owns a 25% stake.
The Santiago-listed company plans to invest $900 million to lift production to 18 million mt/year by 2015, De Andraca said. (Source: Platts)
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