Iron ore’s prospects for the rest of the year aren’t that poor as supplies from less efficient mines dwindle, according to Atlas Iron.
Chinese buyers are also replenishing inventories, boosting demand, said David Flanagan, managing director of the Perth-based company. Global supplies from high-cost mines will continue to shrink, he said in an interview on Wednesday. Atlas operates mines in Australia’s ore-rich Pilbara region.
The commodity’s been on a roller-coaster in 2015, sinking to a six-year low in April on rising low-cost output and weaker growth in China, the biggest buyer, before rebounding into a bull market the same month.
Ore then fell to a new low at the start of July as some banks forecast that prices would tumble below $US40, before rallying into another bull market and reaching a two-month high on Wednesday.
“There’s more opportunity for an uptick in iron ore prices than there is for a downward tick,” Flanagan said by phone. “There’s opportunity for more mines to close and there’s also opportunity for a buying rally leading into December.”
Ore with 62 per cent content at Qingdao rose 1.3 per cent to $US58.18 a dry metric ton on Wednesday, the highest since July 1, according to Metal Bulletin Ltd. Prices bottomed at $US44.59 on July 8, a record in data going back to May 2009.
“We’re seeing constant declines in stockpiles in China, and that tells me that there’s not an oversupply in iron ore,” Flanagan said. “People need to basically restock.”
For the rest of this article, click here: http://www.afr.com/business/mining/iron-ore/atlas-md-david-flanagan-optimistic-about-outlook-for-iron-ore-20150909-gjj18y