up 2.8% in london, page-3

re: closed up 3.19% at all time high We could possibly see the $21.50 Barrier broken on Monday. The ADR equivalent is $21.55.

It has to first test the BHP high of $21.47.
If it can break through the $21.50 barrier then it should cruise to $22.00. Only a matter of time.



The Courier Mail

BHP, Rio rise on analyst upgrade

16sep05
THE two big miners Rio Tinto and BHP Billiton posted strong gains today after a major investment house upgraded its iron ore price forecasts.

Analysts said the two miners had also been boosted by Rio Tinto (rio.ASX:Quote,News) chairman Paul Skinner's statement that the company maintained a strong positive view of China's economic prospects and expected continuing "robust" demand for its products.

Analysts at trading house UBS raised their iron ore price forecasts for 2006 and 2007 after increasing their estimate of Chinese steel production by 8 per cent.

UBS are now forecasting a 10 per cent price increase for iron ore in 2006, where they had been predicting a 20 per cent decrease.

And in 2007 they are predicting the price will remain static, where previously they had also forecast a drop of 20 per cent.









UBS analysts said that despite the forecasts of continuing strong demand from Chinese steel manufacturers, they did not expect Rio Tinto and BHP Billiton (bhp.ASX:Quote,News) would push for a repeat of the staggering contract price increases they won from the Chinese last year.

"We expect that iron ore producers may not aggressively look for another big price increase this year in order to balance long-term Chinese market opportunities with profit maximisation," UBS said in a client note.

"Nevertheless we believe that the Australian producers may be successful in obtaining an additional increase in price to account for freight advantages."

As a result UBS has upgraded its rating of Rio Tinto and BHP Billiton from Neutral 2 to Buy 2.

At 1410 AEST today shares in Rio Tinto had risen $1.20 or 2.29 per cent to $53.64 while BHP Billiton was up 33c or 1.59 per cent to $21.03.

Shaw Stockbroking mining analyst Ted Leschke said the share prices had been driven up partly by the UBS upgrade and partly by Mr Skinner's comments.

"The effect of those two together is quite powerful," he said.

After a Rio Tinto board meeting in Shanghai yesterday Mr Skinner said it was likely China's contribution to the miner's sales would continue to increase.

Mr Skinner said that after spending time meeting customers in China Rio Tinto board members had developed a "strong net positive view" of the Chinese economy's future.

Cheers markco2