Iron's blockbuster rally under threat
2016's rally tough act to follow as this year will bring more supply than current pricing can handle
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IRON ore has a very tough act to follow in 2017. After surging last year in a rally that caught out many investors, the commodity faces a challenge as supply concerns re-emerge, with Vale SA bringing on the industry's biggest project and holdings at China's ports at a record.
Seaborne supply is expected to remain strong on shipments from Vale's newly completed S11D project in Brazil, and as miners look to take advantage of current prices, according to Tan Hui Heng, a Singapore-based analyst at Marex Spectron. That, coupled with slowing demand, may hurt iron ore, he said, joining banks including Morgan Stanley in expecting a retreat. On Tuesday, futures in China sank to the lowest close in eight weeks.
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