AUSTRALIA INCREASES IRON ORE PROJECTIONS

JAKARTA - The Ministry of Industry, Innovation and Science of Australia where projected iron ore prices in 2018 and 2019.

The average price of iron ore is projected to reach US $ 61.8 per ton this year and drop to US $ 51.1 per ton in 2019. This projection is higher than the previous estimate of US $ 52.6 per ton in 2018 and US $ 51 , 1 per ton next year.

Although hoarse, ore prices stand at a low level.

"Prices are forecast to moderate, reflecting more on the basis of rising supply from Brazil and moderate demand from China," the Australian Department of Industry, Innovation and Science said in a report cited by Bloomberg on Monday (9/4).

Australia is the world's largest exporter of iron ore. This year, the Kangaroo State is projected to export 874 million tonnes of iron ore and 880 million tonnes by 2019.

The Australian government estimates that global iron ore production volume will increase this year and next year will be boosted by new mines, including S11D projections by Brazilian giant mine Vale SA.

On the other hand, global demand for iron ore is projected to shrink due to a drop in imports by China amidst sluggish steel production in the next few years.

CHINA CONSUMPTION

"Demand for iron ore imports is expected to be weighed down by steel production in China that will decline every year until 2023," said the Department of Industry, Innovation and Science of Australia.

In addition, the main driver of China's decline in steel production is slowing construction activity and infrastructure investment and increasingly stringent environmental regulations.

China's iron ore imports are expected to decline from 1.08 billion tons this year to 1.04 billion tons by 2023.

At the same time, Panda State steel output will fall from 832 million tonnes this year to 805 million by 2023, while local steel consumption fell from 772 million tonnes to 742 million.

The Panda State absorbs like three global iron ore supplies and displays about 50% of the world's steel so that its performance is very influential on the commodity market.

"The projection for China's steel consumption implies smoothing China's steel intensity and results in China follow a different path with Japan or South Korea that consumes large amounts of steel for the car and shipbuilding industries," the report said.

China is the world's largest steelmaker and global buyer of iron ore by taking cargo from miners like Vale SA and Rio Tinto Group Australia, BHP Billiton Ltd., and Fortescue Metals Group Ltd.

Ahead of the report's release, Port Hedland in Australia which handles cargo for projection Roy Hill BHP, Fortescue, and Gina Rinehart reported volume records for the March period. Exports rose to 42.08 million tons last month from 38.5 million tons in February and 39.09 million a year earlier, according to port authority data on Friday (6/4).

On the Dalian Commodity Exchange, iron ore prices for September delivery fell 1.26 points, or 1.78 percent, to $ 68.52 a ton on Monday (9/4) to 18:55 pm. That number represents a decline in a row in the past week.

SOURCE: Bisnis Indonesia