“The iron ore market has risen to “bubble” levels that will burst as new mines create oversupply of the steelmaking raw material, according to Baosteel Group Corp., China’s second-biggest mill.
“There is a bubble in this market, many are gambling,” making acquisitions and investment expensive, Chairman Xu Lejiangsaid in an interview in Shanghai, without saying when prices would drop. “Everyone who has money is rushing in to invest in iron ore.”
Vale SA (VALE3), Rio Tinto Group and BHP Billiton Ltd. (BHP), the three biggest suppliers, plan to spend $45 billion on mines. Global exports of iron ore may gain 28 percent to 1.4 billion metric tons by 2016, the Australian Bureau of Agricultural and Resource Economics and Sciences has forecast.”
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