In the first half of next year, iron ore can reach US$122 per ton

UBS issued a report saying that based on the downward adjustment of iron ore price forecast, the earnings per share for 2012-14 will be reduced by 18%/13%/11% to 0.38/0.41/5.38 US dollars; the target price of this stock is lowered by 2.11 yuan. To 1.93 yuan, the rating remains "buy."

The commodity team will reduce its iron ore price forecast for 2012-14 by 2%/2%/1% to US$120/116/103 per ton. Due to seasonal increases in Asian steel production and tight short-term supply growth, the bank expects iron ore prices to reach US$122 per ton in the first half of next year, which is 14% higher than the average price of 107 yuan in July-December of this year; prices in the second half of next year It fell by 9.4% from the first half of the year, as the seasonal decline of steel production and the increase of Australian exports increased.

UBS stated that with the commissioning of the K&S project in 2014, the output of iron ore concentrate will increase from 820,000 tons this year to 4.1 million tons in 2014, which will help offset the impact of falling prices in the short and medium term.