Emerging market demand for steel and iron ore will be
the main drivers in the coming years with
China
the most important, analysts said Thursday.
For iron ore "global demand growth is important but it's really down to
China
,"
said
Macquarie
analyst Jim Lennon speaking at a Steel Business Briefing seminar.
Lennon forecasts
China
's
demand for iron ore to reaccelerate in 2011 with the price between $150 a
metric ton and $200/ton in the next two years.
"Without China we're in trouble--the world steel production ex-China is
still languishing," said analyst Paul Gray from Goldman Sachs and Partners
Australia Pty Ltd.
Gray forecasts steel production growth to average 4% over the long term. He
said iron ore prices will rise in 2011 but he expects the market to be in
oversupply by 2014 due to new output from areas like
West Africa
.
"The seaborne iron ore market has grown [an] average of 15 million tons [a
year] and we expect doubling of that rate over the next five years," Gray
said.
However, HSBC economist Mark Berrisford-Smith warned that while
China
got its economic growth right so far that doesn't rule out the risk that it may
falter.
BHP Billiton Ltd. (BHP) forecasts that
China
's
steel demand will double by 2025 to 1.1 billion tons.