Hong Kong: Analysts are predicting another massive year of steel output and iron ore imports which should keep the Baltic Dry Index in need of an oxygen mask, so high up will the indices be. Lehman Brothers analysts have said strong worldwide demand for iron ore, will drive steel-making costs up as much as 25% in 2008.
Global iron ore export in 2008 is likely to increase by 8.5% to 905m tonnes, according to the Australian Bureau of Agricultural and Resource Economics. Australia and Brazil are likely to notch a growth of almost 15% YoY, where as the other iron ore major nation India is likely to remain stagnate. China's share of global iron ore trade in 2008 is expected to increase to 48.3% as compared to 46.2% in 2007, likely to hoover up a massive 437m tonnes.
Moody's Investors Service said strong global demand for steel has supported prices in every region throughout the world, with China consuming tremendous amounts of material as well as producing it.
"Demand in the US has also remained solid, despite weakness in the appliance and automotive markets," Moody's analyst Carol Cowan wrote in a note to clients.
Under pressure from the United States and Europe, China recently said it would place export tariffs on more steel products, effective yesterday. [02/01/08]
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