Iron's in a sweet spot with good profits, little new supply

Rio de Janeiro

THE world's biggest producer of iron ore says the industry is enjoying a Goldilocks moment with prices generating a tidy profit but are not enough to lure much new supply.

"The market is in a sweet spot right now from US$60 to US$70," Vale chief financial officer Luciano Siani Pires told Bloomberg on Thursday. "It is a price which does not incentivise too much swing capacity to come back and it's a very profitable range for major mining companies." Prices of the steel-making ingredient have see-sawed this year, rallying to almost US$95 in February before tumbling to US$53 in mid-June as glut fears resurfaced. Now they're back above US$70 after a pickup in demand from Chinese steel mills. But prices probably will average US$50 in the final three months as falling steel prices h…