From the AFR today:
BHP Billiton president of marketing Mike Henry says the dramatic 31 per cent fall in the iron ore price this year has not come as a surprise, and the world’s largest miner is tipping further volatility in the spot price in the months ahead.
“The decline in iron ore prices wasn’t unexpected for us … what we’re seeing today in the marketplace is within the range of expectations that we’ve had,” Mr Henry said.
…“We’ve been saying for a long period of time now that growth rates in China will begin to slow, that you would see steel intensity slowing at an even greater rate than GDP declines, and at the same time you’d see a lot more low cost supply coming to market that would bring prices down,” Mr Henry said after a tour of the miner’s operations in Port Hedland.
It is true that BHP has been ahead of other miners in foreseeing and preparing for ongoing iron ore price declines. But it’s not really fair to say that that has been the case “for along time”. BHP’s massive Port Hedland outer harbour development wasn’t scrapped until mid 2012 and it is from around then, two years ago, that it began to change its strategy. Even then I think it fair to say that it did not foresee the magnitude of the growth slowdown underway in China.
It was the best in a bad class.
