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Substantial iron ore price increase expected Posted: Thu, 14 Feb 2008 [miningmx.com] -- KUMBA Iron Ore expects iron ore prices to increase “substantially” this year because supply is unable to keep up with demand, but it warned operating costs in South Africa are likely to rise because of the power situation here. “Although global economic growth is expected to slow in the year ahead as the unwinding of the housing finance problems in the United States impacts negatively on economic growth in the United States and elsewhere, the global market for iron ore is expected to remain tight in the short to medium term,” Kumba said in it annual results report. “The economies of China and the rest of Asia are expected to continue growing on the back of strong domestic demand and high levels of domestic fixed investment, providing continued strong growth in the demand for iron ore,” it said. China is expected to increase steel production to 750 million tonnes per annum (mtpa) by 2012 from 420 mtpa in 2006, which means it will need to import more than 730 mtpa of iron ore. The skills shortage afflicting the entire mining sector will curtail the rate at which new projects are brought on stream, while there are rail, port and dry bulk vessel shortages, which will negatively affect supplies to the market. Click Here to subscribe to our daily newsletter
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