RIO DE JANEIRO — Brazilian mining company Vale SA is back to forecasting iron-ore prices after a four-month rally in the market injected executives with a level of optimism not seen in years.
Vale’s iron-ore director dusted off his so-called crystal ball Thursday to predict that prices for the commodity will have a “floor” of $70 to $75 and could average above $80 for the year.
“In summary, 2017 is going to be a very strong year,” the executive, Peter Poppinga, said in a conference call. “Steel demand is greater than in 2016. New supply that’s going to come is less than in 2016, and stocks are unbalanced. Therefore, prices will be significantly higher than in 2016.”
Vale is the world’s largest iron-ore producer, the raw material of steel, and analysts routinely ask its executives for their price forecasts during quarterly conference calls.
Mr. Poppinga’s predecessor, José Carlos Martins, was often happy to provide them, joking that he had a crystal ball that allowed him to predict where the market was headed. Until early 2014, he maintained that the prevalence of high-cost supply in China meant that prices below $110 a ton couldn’t be sustained.
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