How low is iron ore going to go?

Advertisement

Deutsche has a crack at it today:

Iron ore supply has responded to the more favourable pricing environment Iron ore supply has responded across all quarters after a weak first quarter from the major seaborne producers. First quarter production reports confirm that severe weather at the start of the year took its toll on the Pilbara majors. All three reported lower sequential production, while Rio Tinto and FMG both suffered year-on-year declines. First quarter output from BHP Billiton was up by just 0.7Mt year on year.

For the year as a whole we forecast a net 35Mt increase in Australian output, comprising a small drop from FMG, a decent rise from RIO and BHP and an additional 15Mt from Roy Hill. We also expect a small increase of 3Mt from the mid cap / junior space. Roy Hill shipments were approximately 8Mt in Q1 and the owners are targeting full capacity of 55Mt by the end of the year.

The full text of this article is available to MacroBusiness subscribers

$1 for your first month, then:
Cancel at any time through our billing provider, Stripe
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.