After a robust 2016 and 2017, the international iron ore prices have settled thanks to a steady demand for iron ore from China. A decrease in Chinese iron ore extraction and an increase in the need for iron ore within China’s borders have created something of a boom market for iron ore that looks to sustain itself for several months into 2018.
Experts foresee iron ore futures to reach an average of about $73 per metric ton into next year, which is relatively consistent with iron’s current price. Why is the price of iron surging? What does this mean for the average consumer? Iron Ore Is All Around Us
The surge in demand for iron ore might surprise the average consumer. For those in the industry, this increasingly popular ore is nothing new. Iron ore is found in a variety of products that are produced and used every day. First and foremost, it’s important to understand that iron is a key component in steel, one of the most popular metals in the world — it accounts for about 90 percent of all metal that is refined.
Hammers, nails, and hinges are the most well-known uses for iron ore. However, the valuable material is also used in electronic devices like computers and cell phones. Iron also ends up in foods and vitamins to help supplement the body’s need for the mineral.
As the rest of the world begins to develop, the demand for this popular metal has skyrocketed.
When trying to determine whether or not it’s worth reacting to the demand for iron ore, things get complicated. When iron ore futures spiked in 2016, it was based on two factors. First, the Chinese import demand was soaring in the wake of their drop in domestic iron ore extraction. Second, the incoming Trump administration in the United States was expected to push for extensive infrastructure projects (the result of which would require a lot of steel).
Sadly, the second of those two predictions has yet to materialize. On the other hand, the demand for iron ore in China has defied expectations and remained strong. As a result, some experts expect the price of iron ore to remain relatively steady over the next several months.
Whether demand remains steady or not, one thing is certain, the worldwide need for iron ore isn’t going away anytime soon.
Iron ore prices are set for a tumultuous future, regardless of whether it rises or falls. That’s why it’s so important to ensure that your operational expenses — like the machinery you use to screen your iron ore — provide the best highest return on your investment.
When you need efficient machinery that will last longer and save you time and money, General Kinematics and our line of high-quality mining equipment are here for you. For over half a century, we’ve been providing the world’s best mining equipment and solutions for companies around the globe. Contact us today and discover how GK can solve your sorting challenges.