SYDNEY, Feb 24 (Reuters) – Global miner BHP Billiton on Tuesday batted away suggestions of a turnaround in iron ore prices anytime soon – a bad omen for smaller producers struggling close to the break even point.
Chief Executive Andrew Mackenzie, releasing BHP’s half-year results, said iron ore demand in the all-important Chinese market was flat, although imports have increased by displacing higher-cost domestic supply.
But as supply costs have fallen, the price – around $62 a tonne – is now “more reflective of the medium-term fundamentals”, he said.
That’s a hefty enough price to keep BHP, the world’s third-biggest iron ore miner, and fellow mega-producers Vale and Rio Tinto in the black but is borderline for smaller rivals.
Atlas Iron, which plans output of about 14 million tonnes in fiscal 2015 against BHP’s 245 million tonnes, posted an underlying net loss of A$139 million ($108 million) for the half-year, against a A$61 million profit a year earlier.
Managing Director Ken Brinsden said the company would be “unrelenting” in its focus on cost reduction and forecast its all-in cost for producing iron ore would fall around 9 percent to A$60-A$63 per tonne in the six months to June 30.
This is just above the A$66.82 Atlas received for its iron ore in the six months to end-December, more than 40 percent less than a year earlier.
For the rest of this article, click here: http://in.reuters.com/article/2015/02/24/iron-bhp-prices-idINL4N0VY13S20150224