Cliffs CEO Says ‘Know-Nothing’ Iron Bears Will Be Wrong Again – by Jasmine Ng (Bloomberg News – September 13, 2016)

The largest U.S. iron-ore producer says the bears are getting it wrong all over again. Prices will probably be sustained above $50 a metric ton as demand in China is stable and the impact of new supply won’t be as severe as forecast, according to Cliffs Natural Resources Inc.

“Those forecasts saying that prices will go to $40 or $30 or whatever, they haven’t materialized,” Chief Executive Officer Lourenco Goncalves said in a phone interview. “It’s not going to happen at the end of the year. Do you know what they’re going to say next? They’ll say it’ll be next year. That’s the reason I don’t believe them. They don’t know anything.”

Iron ore has rallied in 2016, confounding a slew of predictions earlier in the year that lackluster demand in China and rising low-cost supply would combine to drag prices lower. With banks and miners now focusing on the months through to the year-end, some forecasters are again predicting a retreat.

This month, BHP Billiton Ltd. called time on the unexpected rally, saying that prices may begin to drop as new supply hits the market. rices would probably hold between $50 and $60 a ton, said Goncalves, citing a recent outlook from Li Xinchuang, a vice chairman at the China Iron & Steel Association. Demand in China — the world’s largest buyer of seaborne ore — would be stable between 760 million and 800 million tons a year, according to Goncalves. “I do believe Mr. Li,” he said.

When 2016 kicked off, there were plenty of calls that steel output in China would post a significant drop.

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