A subtle change of intentions by 2 of the 3 big iron ore players

Pengana Capital Group

Pengana Capital Group

The doom and gloom around the seemingly hopeless state of the iron ore market abated during April with the spot price of iron ore climbing 9.4%. BHP Billiton announced it would delay its $500m Port Hedland expansion project implying it was not on a course to grow production volumes at any price! Vale in a conference call to investors announced that it was willing to remove up to 30 million tonnes of iron ore from the export market if prices became too weak. The subtle change of “intentions” by 2 of the big 3 iron ore exporters has been enough to change the tone of the iron ore market. Seemingly, the market has been buoyed by an economic rationale being to the forefront of Vale’s and BHP Billiton’s thinking when looking to grow market share and volumes in iron ore rather than simply a growth for growth’s sake imperative. This subtle change has been enough to stop the “free fall” in iron price as confidence returns to the supply chain and the risks of holding inventory diminish. (PenganaGlobalResources) (VIEW LINK)

Pengana Capital Group
Fund Manager
Pengana Capital Group

Pengana Capital Group (ASX: PCG) is an ASX listed diversified funds management group specialising in global and Australian managed funds, with distinct investment strategies that aim to deliver superior risk-adjusted returns to investors.

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