The Rising Influence of Rising Affluence

[DewDiligence]

Iron Miners Forecast 4Q10 Bounce in Spot Price

http://www.reuters.com/article/idAFN208989020100720

›RIO DE JANEIRO, July 20 (Reuters) – Spot prices for iron ore will rise in the fourth quarter after a decline in the past months, officials from Brazilian mining companies Vale and MMX said on Tuesday.

"Spot prices fell in the third quarter, which we consider seasonal. Our expectation is that they will increase again in the fourth quarter," said Claudio Alves, director for iron sales in the Americas for Vale (VALE) -- the world's largest iron ore producer.

Spot iron prices have fallen to around $117 per tonne after reaching highs above $180 per tonne due to a range of factors including slowing Chinese demand and a general softening of commodities markets of late.

"Demand is currently strong in the market. We have requests for additional contracts every day," said Roger Downey, president of iron mining firm MMX (MMXM3.SA), which also predicted prices would rebound.

Both were speaking at the CRU Latin American Iron & Steel Trends conference in Rio de Janeiro.

Iron markets are operating under a new quarterly pricing system that replaced the decades-old annual benchmark system [#msg-48543418]. Prices under the quarterly system are based on spot prices from the previous quarter.

Miners could move to monthly pricing due to increased volatility in iron prices, an industry analyst said on Tuesday. [I seriously doubt that, but what do I know?]‹