Brazilian miner Vale SA expects the global price of iron ore to average above $80 per tonne in 2017, on the back of increasing steel demand and a smaller rise in new production entering the market, the company’s executive director of ferrous minerals said.

“2017 will be a strong year, the demand for steel is higher than 2016 and the new supply entering the market is less than in 2016,” Peter Poppinga said on a call to discuss fourth-quarter results for the world’s largest iron ore producer.

Poppinga said Vale estimates just 45 million tonnes of new iron ore supply will come into the seaborne market in 2017, down from 70 million tonnes last year.

The price of iron ore rose around 80 percent over 2016. On Tuesday the price of spot iron ore hit $94.86, the highest since August 2014.

Poppinga said the combination in China of infrastructure stimulus and the exiting of low-grade domestic iron ore production should continue to prop up prices throughout the year.

Looking ahead to 2018, Poppinga said he expected at least 50 percent of fresh iron ore supply entering the market to be Vale’s own production as its new S11D mine starts to reach capacity. Vale will be careful not to upset the balance of the market, he said.

“Vale will behave pretty conservatively and responsibly, always maximizing our margins,” he said.

Source: Reuters (Reporting by Stephen Eisenhammer and Marta Nogueira; Editing by W Simon and Meredith Mazzilli)