Find below the iron ore price table for April 11, 2013:
Current market action is neither here nor there, really.
In news today, BHP has it right. From the FT:
“China will aim for more moderated growth. And I think more moderated growth is around the 7 to 8 per cent mark over the next couple of years, trending down to 6 per cent,” Graham Kerr, BHP’s chief financial officer, told the Bloomberg Economic Australian Economic Summit in Sydney on Wednesday.
…Mr Kerr said: “The biggest risk is clearly from our perspective what happens in China, and around the developing world, but predominantly China.”
BHP cut costs at an annualised rate of $1.9bn in the six months to December – “the start of the journey”, said Mr Kerr. “We have made good progress but there’s more to come.”
Mr Kerr said no new projects would be signed off in the current financial year to June, but said BHP’s $10bn Jansen potash project in the Canadian province of Saskatchewan could “come to the board” in the next financial year.
…Mr Kerr defended BHP’s decision to expand in iron ore, arguing that it would be “hugely profitable” even if prices fell sharply over the next four to five years, because of the low-cost nature of its operations in Western Australia.
…“Australia is not the only place in the world that has iron ore. And the reality is if you do not get your product to the market then someone else will,” Mr Kerr countered.
So, BHP can see China slowing, will drive down the price of iron ore for market share while getting its balance sheet in order, then it will take its pick of marginal producers when the carnage comes. It may end up with Rio in the bag yet.
