London — Iron ore and metals miner Eurasian Resources Group said Tuesday it expects iron ore prices have fallen sufficiently to levels reflecting fundamentals and will be stable for the next year at $55-$65/dry mt.
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Iron ore prices may average close to current levels for the next 12 months, while short-term demand swings in China may be disruptive, the company highlighted in a market outlook.
China may reduce steel production by about 33 million mt between mid-November and the end of March 2018 in northern China to cut pollution, based on S&P Global Platts estimates. Iron ore 62% Fe prices have fallen from a recent monthly high of $75.31/dmt CFR China in August.
"We believe that iron ore prices have now corrected close to fundamentally justified levels, and will stay mostly within the $55-$65/dmt CFR China range over the next 12 months," ERG CEO Benedikt Sobotka said in a statement.
Platts assessed IODEX 62% Fe fines prices at $59.50/dmt on Tuesday, up $0.50 from Monday.
"Our long-term outlook on iron ore remains constructive," ERG added.
"While steel prices are likely to stay high during the winter period, lower production volumes due to strict seasonal air pollution control in China will impact iron ore demand."
Kazakhstan-focused ERG is a major iron ore exporter to Russia, supplying concentrate and pellets.
ERG last week said it secured revised terms for a $95 million revolving line of credit from Eurasian Development Bank on pre-export financing of iron ore supplies from the group's JSC Sokolov-Sarbai Mining Production Association complex.