According to Roskill, iron ore prices will rise in 2013.
According to Roskill, iron ore prices will rise in 2013.

Prices for iron ore hit US$150/t in January, an 80% increase over the lows in September of last year. In addition, mining company BHP Billiton says that the expansion of its Jimblebar mine in Western Australia remains on track for first production in the March 2013 quarter. The company expects to reach a production rate of 183Mt in FY2013, up 5% from 2012. 

Rio Tinto is also targeting production of 290Mt by early 2014, compared to 253Mt in 2012 this year. 

In Brazil, Vale is continuing the expansion of its S-11D mining project, expected to add 90Mt, or approximately 30% of its current capacity, by 2016. And although Anglo American’s Minas Rio project is now commonly referred to as the world’s most expensive iron ore, production is nonetheless set to commence in 2015, to add an initial capacity of 26.5Mtpy to the market, Roskill says.

However, following the 2012 slump in prices, smaller projects that depend on speculative investment are failing to compete with those able to rely on a stable cas-flow.  The situation appears unlikely to improve, as Roskill forecasts that prices may fall to US$100/t by 2015 and US$90/t by 2016. On the back of lower demand growth forecasts and decreased concern over access to supplies, announcements of new joint ventures with steel companies have also diminished.