Murdoch’s Budget iron ore lie goes on, from Elizabeth Redman:
The iron ore price has slipped further and is a hair above the May Budget’s estimate of $US55 a tonne, as the commodity continues to cool from levels that were widely viewed as unsustainable.
Iron ore lost 0.2 per cent to $US55.10 overnight, according to The Steel Index, from $US55.20 the previous day.
The Budget price was FOB, the spot price is CFR. To equalise the two you need to add $5 freight to the Budget forecast price. When you add that to the Budget forecast it becomes $60 and has been underwater for most of the last two quarters (averaging -$3.6)
Moreover, if you look ahead using the MB outlook or SGX futures the pain is set to get worse not better:
Given how bullish the iron ore market has been this year versus expectations, that the Budget is still under water tells you just how mendacious it was.
