BHP, Rio Tinto Say Chinese Demand for Iron Ore Not Fading – by Rhiannon Hoyle (Wall Street Journal – March 10, 2015)

http://www.wsj.com/

BHP executive says outlook for China’s resource demand remains compelling

SYDNEY—The world’s two largest mining companies say they are convinced China’s hunger for iron ore isn’t about to fade, even as the price plumbed new lows after Beijing’s official acceptance it is set for slower economic growth.

In an interview with The Wall Street Journal, BHP Billiton Ltd. ’s iron-ore president Jimmy Wilson said the outlook for China’s resource demand remained compelling, as the world’s second-largest economy expands from a larger base level.

He said demand for steelmaking ingredient iron ore from the country’s manufacturing sector had been running above BHP’s expectations in recent months and the country’s cooling property market could also be set for an uptick.

“I think we have to appreciate that China is getting bigger—they are targeting 7% [growth] and they are actually uncannily capable of delivering against those targets,” Mr. Wilson said. “We should never underestimate what is happening in China, and what continues to happen in China.”

His remarks echoed earlier comments from Rio Tinto PLC’s iron-ore chief executive Andrew Harding, who expressed optimism Beijing can maneuver the Chinese economy into a new stage of growth during a speech in Perth on Tuesday.

China last week lowered its economic growth forecast to about 7% for 2015. That compared with 7.4% growth last year, its lowest level in nearly a quarter-century.

Leaders have dubbed it a “new normal” during the annual National People’s Congress in Beijing.

China’s more sober tone has rattled the global iron-ore market. Around $58 a ton, the spot iron-ore price is at its lowest since The Steel Index began publishing prices in 2008. China’s iron-ore imports are already down 0.9% year-to-date, according to the latest customs data.

Mr. Wilson said the sharp downturn in prices—which have halved in the past year—isn’t drastically different from BHP’s internal expectations.

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