Denmark’s Saxo Bank said on Monday it expects iron ore prices to recover to $100 per tonne in the next six to nine months, after falling below $80 for the first time in five years.
Saxo Bank sees growing, low-cost production from major miners like Vale and Rio Tinto driving high-cost Chinese miners out of business, partially rebalancing the market.
“The weakest will fall,” said Ole Hansen, senior commodity strategist at Saxo Bank, in a press conference in Sao Paulo.
For the short-term, though, new lows remain possible.
“We haven’t found a floor yet... But I don’t see a major fall from here,” he said, attributing the recent drop in prices to market concerns over China’s economy growth pace. (Editing by Alden Bentley)