Iron ore prices to cool off as China set to raise output

Iron ore prices, which have been steadily climbing to touch $200 per tonne, may cool off in the long run as China is all set to increase iron ore production. The country has just identified 4-5 billion tonne iron ore mines near MongoliaIron ore prices, which have been steadily climbing to touch $200 per tonne, may cool off in the long run as China is all set to increase iron ore production. The country has just identified 4-5 billion tonne iron ore mines near Mongolia and this may impact their buying pattern in the global market. The current upswing may not continue for long as China is trying to bring new mines into production.

Since China is the largest producer of steel and is a large buyer of iron ore from the global market, the new development is expected to influence their purchases. Since they buy a substantial quantity of iron ore from India, a drop in their off take could have a bearish effect on Indian exports.

In the next few months, the outlook on prices is expected to remain bullish as the global steel industry is led by the revival in demand from the Chinese steel makers. The trading community expects prices to remain firm in the next few months.

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