BHP to address GLUT - Official !

Wow, weeks before it was gun blazing about massive expansion, then expansion was ALL OVER, now it is going to deal with the GLUT....LOL

http://in.reuters.com/article/2014/12/11/bhp-china-ironore-idINL3N0TV5B220141211

RPT-BHP Billiton sees China steel consumption slowing in 2015

Dec 11 (Reuters) - Iron ore giant BHP Billiton expects Chinese steel consumption growth to slow next year and has already adjusted its strategy to cope with a supply glut that has caused global prices to collapse, executives said on Thursday.

"We anticipated the change towards current market conditions and the rebalancing of supply and demand after a period of massive expansion and a time when supply struggled with demand, we saw these changes coming a long way off," Chief Executive Andrew Mackenzie told reporters.

It is a sign that one of the iron ore majors is scaling back expectations after years of bullishness about Chinese demand. Mackenzie added that BHP had stopped approving new investment in major iron ore production growth as early as 2011. BHP Billiton and other big miners had embarked on a rapid production capacity expansion programme, banking on sustained demand growth in top buyer China. true But though imports into China have surged, prices have fallen by nearly half to under $70 a tonne, with Chinese steel output growth slowing to around 3 percent. BHP Billiton said while Chinese production growth was likely to remain at about 3-3.5 percent until 2020, a slowdown in consumption was now anticipated. "Consumption growth is about 1.5 percent this year and slowing to between 0.5-1.5 percent next year -- we see modest to marginal steel consumption growth," said Alan Chirgwin, general manager and marketing for iron ore. With iron ore prices at five-year lows, the big miners have expected high-cost Chinese producers to be displaced by cheaper foreign supplies, and imports to China in the first 11 months rose by 13.4 percent to 846 million tonnes. J

immy Wilson, BHP's president in charge of iron ore, said the equivalent of 80 million tonnes of high-grade domestic ore had been removed from the market since the start of the year, and total Chinese output was likely to fall to 240-250 million tonnes this year, and to 200 million tonnes in the long term. The firm said more high-cost producers were expected to depart in 2015 as 100-120 million tonnes of new low-cost supplies enter the market, far higher than the estimated demand increase of 30-50 million tonnes.