Iron ore charts for 9th Jan 2014.
Iron ore may have outperformed other commodities last year, but the price of the metal used to make steel looks set to decline this year as China’s growth slows.
China’s continued heavy spending on subways, bridges and other infrastructure kept demand for iron ore high last year. Exports to China from Port Hedland, Australia’s main shipment point for the metal, increased by 34% to 256 million metric tons. Overall shipments of iron ore—including to Japan and South Korea—rose 26% to 318 million tons. Exports of the commodity reached record levels in December.
But a less bright outlook for China’s economy this year, coupled with new iron-ore mines coming on line in Australia, is threatening to drag down prices this year. A decline would damp the outlook for companies like BHP Billiton and Rio Tinto, as well as other producers world-wide.