The global iron ore market is likely to have a shortfall following the dam spill and mine curtailments at top supplier Vale SA, according to Fortescue Metals Group Ltd. founder Andrew Forrest, who cautioned that other producers face constraints in boosting output.
“We do have to face the reality of a potential deficit,” Forrest said in a Bloomberg Television interview at the Boao Forum in Hainan province. While the Australian miner is “looking very hard” at how it can help customers, it can’t guarantee it’ll be able to help fill the deficit, according to Forrest.
Iron ore is heading for the biggest quarterly advance since late 2017 as investors seek to gauge the consequences of the disruption in Brazil, with Citigroup Inc. warning the market has yet to see the full impact of the disaster as a looming mid-year crunch will spur a rally to $100 a ton.
The comments from Fortescue come during a busy week for the market, with Vale set to report earnings later Wednesday after turning in production data on Tuesday.
In the near term Fortescue can’t easily “turn up the dial” in response, Forrest said, echoing recent comments from executives at Australian shippers Rio Tinto Group and BHP Group that they are not in a position to add substantial tons swiftly.
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