JPM warns on big iron ore earnings

Wednesday, 8 April 2015

From The Australian, cracks appear in the sell side iron ore fan club:

“Should prices continue to deteriorate across the board, we believe BHP’s progressive dividend may need to be either re-based, or temporarily paused. RIO’s dividend appears to be safe, although additional capital management would be unlikely to continue in 2016.”

While it keeps a Neutral rating on BHP and an Overweight rating on RIO, the investment bank says spot commodity price scenarios point to significant downside risk to earnings.

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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.