iron ore price

Found this and I hope he is right:

http://www.heraldsun.com.au/business/fortescue-chief-says-strong-demand-will-continue/story-fn7j19iv-1226614437946

FORTESCUE Metals Group chief executive Nev Power says there is no looming oversupply of iron ore and the price of Australia's single largest export item will not drop below $US110 ($A105).

Speaking at the Boao Forum for Asia in China yesterday, Mr Power said the rapid urbanisation of China would continue.

Predictions of steep falls in the price of iron ore were based on faulty analysis and an extremely bearish position on the health of the world's second largest economy, Mr Power said.

He said iron ore's natural price equilibrium was between $US110 and $US130 it would remain there "for quite some time".

Some mining analysts have predicted the price of iron ore will decline sharply from its current level of about $US136 per tonne to as low as $US60 per tonne.

Last week investment bank Morgan Stanley said global iron ore production would overtake supply for the first time in at least a decade from 2014 onwards as iron ore players including Rio Tinto, Fortescue and BHP Billiton rolled out new mine expansions.



"I just don't see this wall of supply that is being talked about coming into the market," Mr Power said.

"Supply comes on at a much more moderate pace than what has been predicted."

He said many iron ore projects that have been announced had not secured funding yet and would go ahead only if the iron ore price remained where it is.

He also said any fall in the price would see smaller producers in China and East Africa significantly cut back on production, which recent reports on the global iron ore supply and demand position had failed to take into account.

"There is a self-regulation here," he said.

Mr Power said the Pilbara was perfectly positioned to supply iron ore to growing markets in China, India and East Africa.

But he warned against Australia thinking China could not source iron ore from elsewhere.

"There is no shortage of raw materials around the world ... particularly iron ore," he said.

"The key is getting it out of the ground efficiently, productively, competitively and reliably and getting it into these markets."

The Boao Forum of international political and business leaders, ends tomorrow.