Will Fortescue destroy big iron?

Among the piles of media surrounding Fortescue Metals Group today one stands out. The AFR’s junket queen, Jenifer Hewitt, has delivered a worthwhile insight from her FMG sponsored trip to the Boao Forum on the weekend:

Andrew Forrest was one of the few world business leaders to have meetings with China’s Xi Jinping at the Boao Forum over the weekend. It’s one more sign of the reach of Forrest’s extensive connections with the highest levels of Chinese political leadership, established over many years.

But such relationships can’t help Fortescue Metals Group with a very basic iron ore problem right now. That problem is when and whether the price for iron ore will lift from lows far deeper and more persistent than Forrest and Fortescue expected at the time of last year’s forum.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.