Westpac: Iron Ore Price Recovery Unlikely Until at Least 2016

Australian Mining reported that Justin Smirk, chief economist at Westpac, doesn’t see the iron ore price recovering until at least 2016. He also believes the metal’s price may sink lower than its current level.

As quoted in the market news:

Smirk said the start-up of Gina Rinehart’s Roy Hill mine later this year could also have a downward effect on the price of iron ore as the operation is poised to be a large, cheap supplier.

Smirk said adjustments would come as some of the marginal Chinese miners left the market but this was not happening “as fast as some people anticipated”.

While Smirk said he did not want to paint a negative view on China, he said the country was in an readjustment phase that was seeing a slow in housing construction.

Smirk said:

The demand pulse is not as strong as it was and we’ve got a strong supply pulse, so we are in a readjustment point right here.

Click here to read the full Australian Mining report.