Find above the iron ore price complex table for December 12, 2012. Stability but for how long?
While I no longer put much faith in it, yesterday the Baltic Dry tanked 8% almost exclusively on tumbling capesize (used for the bulks) rates, which is a bit of a eye-opener:
In other news, yesterday BREE upgraded its ore forecasts for 2012/13. From the SMH:
AUSTRALIA’S top commodities forecaster has revealed a more optimistic outlook for the iron ore sector than the one it offered just three months ago, in the latest sign that confidence in Australia’s most valuable export business is recovering.
In a departure from its gloomy prediction in September that iron ore prices would average just $US101 a tonne in 2013, the Bureau of Resources and Energy Economics increased that prediction on Wednesday to an average of $US106 a tonne.
While still lower than most exporters would hope for, the revised prediction would represent an extra $US2.7 billion ($2.57 billion) worth of revenue should it prove correct.
This is fair enough, BREE also predicts a 9% rise in volumes and reckons:
In 2013, prices are forecast to decrease further and average around US$106 a tonne. Prices in the first half of 2013 are expected to remain around current levels, while prices are forecast to increase in the fourth quarter of 2013 in line with an expected increase in steel consumption demand resulting from Chinese Government infrastructure project and stimulus spending.
To me it’s pretty clearly the other way around and BREE has continued its bad habit of predicting simultaneous price and volume growth. By the end of 2013 I expect iron ore to struggle to stay above $100 at all.
