Steel Products Prices North America
February 9, 2017
Cliffs: Sanity Is Back in the Iron Ore Market
Written by Sandy Williams
“Sanity is back in the seabourne iron ore market,” said Cliffs Natural Resources CEO Lourenco Goncalves in comments during the Cliffs earnings call on Thursday. After the departure of three key executives in the Australian ore market, iron ore prices doubled and Rio Tinto, Vale and BHP are exhibiting disciplined behavior which will support strong iron ore prices for 2017, said Goncalves.
The outspoken CEO also noted that there is a “new dynamic in the Chinese market. The government’s crackdown on air pollution has resulted in steel mills demanding higher grade iron ore. Lower quality inventory is accumulating at docks in China as mills seek 62% Fe or higher grade iron ore for production. China will continue to grow and buy iron ore but be more selective, said Goncalves. “China is no longer in elementary school, China is at least a senior in high school.” “Wait till China gets to college,” said Goncalves, producers of black dirty iron ore will no longer be supplying iron ore.
