The discount hit a record high of $108 a metric ton on Jan. 8.

Demand for raw materials is at record levels, inventories are low, and spare production capacity is largely “exhausted,” the veteran analyst said.

Set to be the world’s largest new iron ore mine, the project will add around 5% to global seaborne supply when it comes on line.

Iron ore prices declined for a third consecutive session on Monday.

The overall picture for the seaborne thermal coal market in Asia is that supply has risen by enough to offset strong demand by China.