BHP plays down chance of recovery in iron ore prices
SYDNEY, Sept 25 (Reuters) - Global miner BHP Billiton on Thursday played down the chance of a recovery in iron ore prices, saying that recent declines reflected the reality of demand and supply in the market for the steel-making ingredient.
Iron ore .IO62-CNI=SI has staged a near-uninterrupted drop since mid-July, shedding nearly 20 percent of its value.
"Everything is headed in the direction one would expect based on rational markets," Mike Henry, president of marketing and technology for BHP, the world's no. 3 iron ore miner, told a media briefing.
Henry said the introduction of millions of additional tonnes into the iron ore market by lower-cost miners, such as BHP, was driving down prices.
"As that happens, and production does a better job keeping up with demand, we are seeing prices revert back to more normal levels," he continued.
He declined to say whether he thought current prices under $80 a tonne - the lowest in five years - represented "normal levels".
Australia's official forecaster this week estimated 2015's average price at $92.40 a tonne, rebounding as higher cost producers are forced out of the market.
BHP plans to increase its iron ore output to 245 million tonnes in the current financial year from 225 million tonnes in the year to the end of June 2014. It hopes to expand to 290 million tonnes in the next few years.
Vale wants its output to grow to 450 million by 2018 from 306 million last year. Continuación...