Iron ore could drop to $ 70 a tonne - Morningstar

Analysts at Research House Morningstar have significantly lowered their forecasts for the price of iron ore, predicting even greater problems for miners.

While the previous long-term forecast was $ 90 per tonne of iron ore, Morningstar now envisions a decline to $ 75 per tonne. The firm's analysts expect the main ingredient for steelmaking to drop to $ 70 /t in 2017, with a subsequent recovery to $ 75 /t by 2020, thanks to lower production from Chinese and some other miners.

Investment bank Goldman Sachs has long been of the opinion that iron ore will fall to an average of $ 80 per tonne next year. “Chinese steel production is expected to reach 800 million tonnes in 2014 and 740 million tonnes in 2020. We believe that real estate markets pose the greatest risk to the Chinese economy, and plans to shift the economy towards increased consumption are ambitious,” the analyst said earlier Goldman Sachs Christian Lele.

Iron ore fell more than 40 percent in 2014. BHP Billiton, Rio Tinto and Vale remain the top miners, driving low prices thanks to their product diversification and low costs. Conditions for other iron ore miners such as Arrium, Atlas Iron and Mineral Resources will remain tough. It is also expected to exit all producers of raw materials with high costs, especially in China.