World’s Top Miner Expects Iron Ore, Coal Price Surge to Cool – by David Stringer (Bloomberg News – November 17, 2016)

BHP Billiton Ltd., the world’s biggest miner, expects soaring prices of iron ore and coking coal to moderate even as China pushes ahead with efforts to restructure its steel sector.

Prices have been supported in recent months by restocking and short-term supply disruptions, Chief Executive Officer Andrew Mackenzie told reporters Thursday in Brisbane following the company’s annual meeting. Iron ore has jumped 66 percent this year to rebound from three straight annual declines, while coking coal has surged about 295 percent.

China’s determination to push through with restructuring in its steel and coal sectors, and the nation’s increasing willingness to favor imports over domestic material, has buoyed prices alongside other short-term catalysts, according to Mackenzie.

“The reality is that once some of things go through, unless we see more supply disruptions, the market fundamentals would suggest some of those current numbers will drift back,” he said. Oil and natural gas are better placed to deliver gains into 2018, Mackenzie said last month.

Chinese stimulus this year has boosted the housing sector and infrastructure spending, while recent data point to an improving economy in the top consumer of metals, energy and grains.

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