Global miner BHP Billiton on Thursday
played down the chance of a recovery in iron ore prices, saying that recent
declines reflected the reality of demand and supply in the market for the
steel-making ingredient.
Iron ore .IO62-CNI=SI has staged a
near-uninterrupted drop since mid-July, shedding nearly 20 percent of its
value."Everything is headed in the direction one would expect based on
rational markets," Mike Henry, president of marketing and technology for BHP, the world's no. 3 iron ore
miner, told a media briefing.
Henry said the introduction of
millions of additional tonnes into the iron ore market by lower-cost miners,
such as BHP, was driving down prices."As that happens, and production does
a better job keeping up with demand, we are seeing prices revert back to more
normal levels," he continued.
He declined to say whether he thought
current prices under $80 a tonne - the lowest in five years - represented
"normal levels".
Australia's official forecaster this
week estimated 2015's average price at $92.40 a tonne, rebounding as higher
cost producers are forced out of the market.
BHP plans to increase its iron ore
output to 245 million tonnes in the current financial year from 225 million
tonnes in the year to the end of June 2014. It hopes to expand to 290 million
tonnes in the next few years.
Vale wants its output to grow to 450
million by 2018 from 306 million last year.
Rio Tinto aims to boost output to 295
million tonnes this year from 266 million last year, and plans to reach 360
million by 2015.
Meanwhile, BHP said on Wednesday that
it was considering a secondary listing in London for shares in its planned new
spin-off after requests from some UK-based investors.
Source: Reuters