Iron Ore Unlikely to Rebound as China Slows, Shale-Inland Says
By Joe Richter
Iron-ore prices, down 25 percent this year, probably won’t rebound as the economy slows in China, the world’s biggest importer and steelmaker, according to Shale- Inland Holdings LLC.
Prices for steel, which have dropped 10 percent in 2012, also won’t recover, said Craig Bouchard, the chief executive officer of Shale-Inland, which fabricates and distributes metals.
China’s economy will grow less than analysts expect, at 5 percent to 6 percent in 2013, Bouchard said. That compares with a Bloomberg survey of as many as 45 analysts, which showed a median forecast of 7.7 percent growth this year and 8 percent in 2013. There’s a 50 percent chance that the U.S. will slide into a recession next year as consumer spending ebbs, he said.
“There’s not going to be a recovery in steel in the next six months,” Bouchard, who founded Schiller Park, Illinois- based Shale-Inland in 2010, said in a telephone interview. “You can’t expect a recovery in iron-ore prices until we see a recovery in the world economy.”
The North America price for hot-rolled coil, a benchmark metal used in cars, trucks and appliances, fell 2.8 percent in the week ended yesterday to $629.17 a short ton, according to data from Steel Business Briefing. Iron ore for immediate delivery was unchanged yesterday at $103.70 a metric ton, according to a price index compiled by The Steel Index Ltd.
To contact the reporter on this story: Joe Richter in New York at jrichter1@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net