Basically, if these Bloomberg numbers are correct, AGO starts making losses if the iron ore price drops and additional US$5/t (assuming a USD/AUD 1.036 exchange rate)
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Iron Ore
Prices of iron ore, Australia’s biggest commodity export, have tumbled 29 percent since June 30 to $94.80 per metric ton yesterday, set for the steepest quarterly decline since The Steel Index Ltd. began compiling the data in November 2008.
Morgan Stanley yesterday cut its average iron ore forecast for the third quarter to $113 a metric ton, down from a previous forecast of $137 a ton. It also trimmed next year’s forecast to $133 a ton from $155 a ton, according to a report.
“In the very short-term, there is further downside risk to the iron ore price,” Peter Richardson, Melbourne-based chief metals economist at Morgan Stanley, said by phone yesterday.
“Prices have been driven essentially by very distressed sellers, which are the large iron ore companies generally.”
To contact the reporters on this story:
Sarah McDonald in Sydney at +61-2-9777-8684 or [email protected]; Elisabeth Behrmann in Sydney at +61-2-9777-8624 or [email protected]
To contact the editor responsible for this story:
Shelley Smith at +852-2977-6623 or
[email protected]
financial forecasts on lower iron ore prices, page-7
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