J.P. Morgan analysts said in a March 12 report that Chinese demand may drive contract iron ore prices up 65% this year, Bloomberg reported. Their original forecast was for an increase of 20%. Steelmakers may pay US$1.59 per dry metric ton as of April 1. "Chinese steel production has surprised post crisis and continues at a pace fast enough to drive up demand for steel raw materials," wrote J.P. Morgan analyst David George in the report. He upgraded his EPS forecast for iron ore exporters Rio Tinto (RIO.ASX, RIO.LSE, RTP.NYSE) and BHP Billiton(BHP.ASX, BLT.LSE, BHP.NYSE) by 31% and 20% respectively for the 2011 fiscal year. The Royal Bank of Scotland and ING Groep NV also increased their estimates of gains in iron ore prices to 80% and 60%, respectively.
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