iron supply catching demand

Iron supply catching demand, says BHP

Jamie Freed
September 17, 2008

BHP BILLITON has painted a bullish view of the long-term demand for commodities but has warned that expanding iron ore supply is beginning to catch up with demand.

In a US version of its annual report released yesterday, the chairman, Don Argus, expressed disappointment in BHP's recent share price performance.

BHP shares peaked at a record $49.55 in mid-May but have since fallen 27 per cent, although closing 35c higher at $36.40 yesterday amid a volatile market.

"The 2008 financial year has seen higher average prices for most of our commodities than in the prior year," the report said. "Demand for raw materials in the emerging market economies has remained strong."

But it warned increased iron ore supply from itself, Rio Tinto, Brazil's Vale, Fortescue Metals and Indian suppliers meant the gap between supply and demand was starting to close.

- may have been an additional factor behind the sp price drop in AXO...just a thought