Iron ore prices will move lower permanently according to Alberto Calderon, former senior BHP Billiton executive and current Orica director, speaking in...
Iron ore prices will move lower permanently according to Alberto Calderon, former senior BHP Billiton executive and current Orica director, speaking in Melbourne on Tuesday. Rising supplies of iron ore will interact with a rising share of scrap in Chinese steel production to keep a lid on prices. Chinese steel demand might show modest rises but iron ore demand will start to fall under the scenario put forward by Calderon. He thought prices would move down to around $70/tonne. The balance of power has tilted in favour of the steel mills which have a vested interest in keeping the market in surplus to maintain prices around marginal costs, he opined. Calderon warned that Australia will face a policy challenge because no other commodity will be valuable enough to compensate for the loss of iron ore export revenues or the taxation benefits from iron ore mining.
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
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