Iron ore prices to remain above US$100/t through 2012 - MMX

Friday, August 20, 2010

Brazilian miner MMX's (Bovespa: MMXM3) commercial director Chequer Hanna Bou Habib expects the price of iron ore to stay above US$100/t through 2012 due to growing demand.

There will be no shortage of iron ore in the future, as investments in production will keep growing to keep pace with consumption levels, Habib said during the SBB Steel Markets Latin America congress, held in Sao Paulo from August 19-20.

MMX's price contracts are at an average of US$144/t in Q3 compared to US$110-112/t in Q2. For the fourth quarter, Habib expects prices to go down but to remain higher than in April-June.

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MMX does not plan to invest in steelmaking in the near future, unlike compatriot miner Vale (NYSE: VALE). However, a future steelmaking project could result from a partnership between local conglomerate EBX's logistics arm LLX (Bovespa: LLXL3) and China's Wuhan Iron & Steel (Wisco), according to Habib.

Local magnate Eike Batista controls EBX, which also controls MMX.