FMG can survive lower iron ore price
2011-07-27 09:21:35 [Print]
Fortescue Metals Group will remain profitable if the iron ore price slumps by AUD 100 a tonne.
Mr Neville Power CEO of FMG said that the price of the steel making commodity is currently near historical highs at about USD 176 per tonne.
Mr Power agrees with consensus among analysts that the iron ore price should fall when planned new supply around the world comes on stream around 2014/15. But Fortescue could endure a price as low as USD 70 a tonne.
He added that "We are making sure our business is capable of surviving in those sorts of environments. There are lots of people who won't survive a USD 70 a tonne ore price."
Mr Power said strong iron ore demand looked set to continue for some time, but prices would fall when China puts the brakes on its surging economy.
China still had a phase of growing consumerism ahead following years of urbanization, India was next in line, and after that, the Middle East.
Grades were falling at Brazilian iron ore mines and costs were high at many Chinese operations, so Australian producers of the bulk commodity were well placed.
Mr Neville Power CEO of FMG said that the price of the steel making commodity is currently near historical highs at about USD 176 per tonne.
Mr Power agrees with consensus among analysts that the iron ore price should fall when planned new supply around the world comes on stream around 2014/15. But Fortescue could endure a price as low as USD 70 a tonne.
He added that "We are making sure our business is capable of surviving in those sorts of environments. There are lots of people who won't survive a USD 70 a tonne ore price."
Mr Power said strong iron ore demand looked set to continue for some time, but prices would fall when China puts the brakes on its surging economy.
China still had a phase of growing consumerism ahead following years of urbanization, India was next in line, and after that, the Middle East.
Grades were falling at Brazilian iron ore mines and costs were high at many Chinese operations, so Australian producers of the bulk commodity were well placed.
