rio expects 50% fall in iron ore price

Can things get any worse? Seems so!



Rio expects 50% fall in iron ore price
• From: AAP
• March 04, 20136:37PM
RIO Tinto expects iron ore prices will fall 50 per cent from current levels to around $US100 per tonne over the next 18 months.

Spot prices are currently hovering above $US150 a tonne after reaching $US159 in January, from a low of $US89 in September 2012.

Rio Tinto chief economist Vivek Tulpule on Monday presented a graph to investors forecasting a steady decline in the iron ore price to just above $US100 per tonne by September 2014.

Although the company on Monday did not elaborate further on the expected price movements, former Iron Ore division boss, now chief executive, Sam Walsh in January warned that the recent price spike was temporary.

Mr Walsh said short-term factors such as restocking by steel mills and traders were behind the recent rise.
Iron ore comprises at least 80 per cent of the Rio Tinto's earnings.

The company on Monday reiterated Mr Walsh's January remarks, saying it remains the lowest-cost iron ore producer compared to rivals BHP Billiton Fortescue Metals Group and Brazilian giant Vale.

It vowed to keep costs below $US50 per tonne.
Mr Tulpule said a peak in steel usage in China was expected to occur between 2020 and 2040, while a peak in steel usage in India and ASEAN countries would not occur before 2040.

Rio Tinto expects demand for copper to continue its upward trajectory, with global demand to approach 30 million tonnes in 2025 as China becomes more urbanised.
The company said strong growth in China alumina imports had been due to concerns over availability of imported bauxite.

It said land sales in China had increased sharply with a recent pick-up in residential sales and prices.
Rio Tinto recently announced a full year net loss for 2012 of almost $US3 billion ($A2.91 billion) and was criticised for its strong dependence on iron ore despite calling itself a diversified resources company.

http://www.theaustralian.com.au/business/breaking-news/rio-predicts-50-fall-in-iron-ore-price/story-e6frg90f-1226590189575