Brazil-based mining giant Vale SA's executive officer of marketing, sales and strategy, Jose Carlos Martins, stated at an industry conference on Wednesday, September 28 that global iron ore supply will be tight for the next few years due to strong steel demand in emerging economies and "disappointing" levels of iron ore capacity in recent years.
Another global recession is not likely to happen despite some risks from Europe's debt crisis and the softened growth of the US economy, the Vale official said. In addition, fast-growing emerging markets are supporting the steel industry's fundamentals, he continued, adding that therefore global iron ore supply will be tighter in the coming years. However, some projects planned by iron ore companies may face "significant risks of delays" due to factors such as environmental concerns.
Mr. Martins also said the current quarterly iron ore pricing system is fair, as it is based on market prices that reflect fundamentals