Australian government: Iron ore price increasing

In a new analysis, the Australian government's Bureau of Resources and Energy Economics estimates that the iron ore price will stabilize after spending five years at a very low level, according to Bloomberg.

Photo: Vale

The supply of iron ore has for five years significantly surpassed the demand, a development that has kept the prices down. Now several mining companies look set to close mines, thus reducing the supply, and this will bring the price back on track, says the Australian Bureau of Resources and Energy Economics in an analysis, according to Bloomberg.

The reductions at the mining companies will start at the companies that operate with high shipping costs, and will be followed by mining companies in China. This will make the iron ore price increase from USD 90 per ton to USD 95 over the next five years, the deputy executive director of Bureau of Resources and Energy Economics tells Bloomberg.

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