Vale reaches $1.8 billion railway concessions deal
The company reached an agreement with local authorities to pay up to some 11 billion reais to renegotiate two railway concession contracts.
Iron ore prices dipped below $70 Tuesday for the first time since 2009 as the world’s top producers continue to boost supply and Chinese demand weakens.
Ore futures for China, the world’s largest consumer, dropped over 3% a record low, while the steel-making ingredient with content rate of 62% delivered to the port of Qingdao dropped 1.2% to $69.58 a dry metric ton today, the lowest so far since June 2009, data from Metal Bulletin (subs. required) shows. This is almost two-thirds below a peak of $191.90 reached in February 2011, which was when huge new mines were being approved.
According to Bloomberg, prices are heading for a 13% loss this month, the most since May. The commodity has lost 48% of its value this year.
Analysts predict that the situation won’t improve much next year. Some global miners such as Rio Tinto (LON:RIO) have said they will ramp up supply by roughly 10%, mostly in the first half of next year, based on Citigroup estimates. This, more than worries about demand, has the futures market predicting that iron ore will be down another 5%, CME Group data shows.
Over the next five years Australia’s iron ore exports are projected to increase at an average annual rate of 5% and total 900 million tonnes in 2019.
Comments
klgmac
Indonesia looks prescient about pulling their supply from the market. I wonder what has replaced the revenue in their economy?