BHP First-Quarter Iron Ore Output Jumps 7% to Meet Estimates – by David Stringer (Bloomberg News – October 21, 2015)

http://www.bloomberg.com/

BHP Billiton Ltd., the world’s biggest mining company, said first-quarter iron ore output rose 7 percent, joining rivals Vale SA and Rio Tinto Group in reporting increased supply amid falling prices and a global glut.

Production was 61.3 million metric tons in the three months ended Sept. 30, Melbourne-based BHP said Wednesday in a statement. That compares with 57.1 million tons in the same period a year earlier and with a median of 61.9 million tons of three analysts surveyed by Bloomberg.

Benchmark iron ore prices have fallen more than 70 percent from a 2011 peak amid slowing economic growth in China and as the largest suppliers raise output to boost savings and squeeze out higher-cost rivals. BHP reported a 4 percent drop in petroleum output and flagged a 6 percent decline in the unit’s capital spending this fiscal year.

“The iron ore result is as expected and is a good result, though we’d expected petroleum to be higher,” said David Lennox, a resource analyst at Fat Prophets in Sydney.

BHP rose 1 percent to A$24.23 in Sydney trading, trimming its decline this year to 12 percent. The Bloomberg World Mining Index of 81 producers has slumped 23 percent this year.

Iron ore was the only of BHP’s product divisions to increase output with copper and petroleum production declining and coal little changed. BHP will cut planned petroleum capital expenditure this fiscal year to $2.9 billion, including U.S. onshore field spending of $1.4 billion.

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