Price warning: A BHP Billiton sign is visible behind a pile of iron ore at the company’s loading facility in Port Hedland, Australia. Producers including BHP Billiton and Fortescue Metals Group have warned prices are poised to retreat after they reported a surge in profits last month fuelled by the price rally and their cost cuts. — Reuters
MELBOURNE: The world’s biggest iron ore miners will be able to withstand the expected plunge in prices because their race to cut production costs has dramatically lowered the industry’s margin pressure point, allowing them to keep fuelling a cash juggernaut that’s revived the mining sector.
More than 90% of producers in the global seaborne market can generate profits at a benchmark price of US$60 a tonne, Adrian Doyle, a Sydney-based senior consultant at researcher CRU Group, said by phone. That compares with about 65% of suppliers able to avoid losses at the same price point three years ago, he said.
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