15-10-2015, 10:02 AM
BHP wary on iron ore prices
Daniel Palmer
[Image: daniel_palmer.png]
North American correspondent
New York
[b]The head of marketing at BHP Billiton has warned recent cuts to global production will do little to raise commodity prices as an early October iron ore rally comes to an abrupt halt.[/b]
“For me it is a normal rational economic decision,” Arnoud Balhuizen told journalists in London overnight, according to several reports. “If you have a cash negative operation you shut it and that doesn’t do anything for price. It shouldn’t be (in operation).”
Mr Balhuizen was particularly cautious on the prospects for iron ore as the key Australian export fails to extend a recent rally above $US55 a tonne.
“By the end of this year, there will be additional iron ore coming from Australia, from Brazil,” he noted.
“Our expectation is that the iron ore market cost curve will continue to flatten and continue to come under pressure.”
At the end of the latest session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US54.30 a tonne, down 1.1 per cent from $US54.90 a tonne in the prior session.
The commodity has now lost almost 3 per cent in two days on the back of a four-day winning streak that had been driven by hopes for persistently low US interest rates and Chinese stimulus.
However, weak trade data out of Beijing on Tuesday and soft inflation numbers in China yesterday have raised fresh concerns about the economy of the world’s largest iron ore consumer.
Business Spectator
- BUSINESS SPECTATOR
- OCTOBER 15, 2015 7:30AM
Daniel Palmer
[Image: daniel_palmer.png]
North American correspondent
New York
[b]The head of marketing at BHP Billiton has warned recent cuts to global production will do little to raise commodity prices as an early October iron ore rally comes to an abrupt halt.[/b]
“For me it is a normal rational economic decision,” Arnoud Balhuizen told journalists in London overnight, according to several reports. “If you have a cash negative operation you shut it and that doesn’t do anything for price. It shouldn’t be (in operation).”
Mr Balhuizen was particularly cautious on the prospects for iron ore as the key Australian export fails to extend a recent rally above $US55 a tonne.
“By the end of this year, there will be additional iron ore coming from Australia, from Brazil,” he noted.
“Our expectation is that the iron ore market cost curve will continue to flatten and continue to come under pressure.”
At the end of the latest session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US54.30 a tonne, down 1.1 per cent from $US54.90 a tonne in the prior session.
The commodity has now lost almost 3 per cent in two days on the back of a four-day winning streak that had been driven by hopes for persistently low US interest rates and Chinese stimulus.
However, weak trade data out of Beijing on Tuesday and soft inflation numbers in China yesterday have raised fresh concerns about the economy of the world’s largest iron ore consumer.
Business Spectator