“In the next few years, iron ore miners with higher production costs will face large losses, and more mergers and acquisitions in the field of iron ore production.†December 20, Morgan Stanley Vice President, China Metals and Mining Zhang Lei said at the 2014 "My Steel" annual meeting.
For next year's global commodity market, Zhang Lei said that Morgan Stanley is most optimistic about the nickel, and iron ore is one of the most pessimistic varieties. She expects the average price of iron ore next year to be around $78/ton, and the long-term price forecast is around $70/ton.
She believes that China's local governments are currently reducing taxes for iron ore companies, and the companies themselves are also reducing costs. Mines that were previously expected to be shut down continue to survive. “The price of iron ore has dropped to the current position, and there is not much room for further decline. However, if the price remains weak, domestic mines will also be shut down in the next 12 months, and the number will be more than this year.†Zhang According to Radium, there were approximately 140 million tons of iron ore production in the world in 2014, equivalent to 10% of the global supply this year.
For the market next year, Zhang Lei said that China's steel demand will remain relatively optimistic. "At present, the government is not willing to let the economy continue to decline. Later, it is expected that there will be stimulus policies. I have a neutral attitude towards iron ore prices, and the fluctuation range may be 60-80 US dollars / ton," she said.
The fall in iron ore prices has caused some steel companies that invested in mines in foreign countries to be “injuredâ€. “I am more worried about the mines that Chinese companies invest in abroad. There will be mergers and acquisitions in the future.†Zhang Lei said that according to the current forecast of iron ore prices by Morgan Stanley, many large projects are losing money. “If these projects cannot be maintained In this case, it may have a certain impact on the long-term supply and demand of iron ore."
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