Fortescue Metals Group Ltd. Chairman Andrew Forrest, who’s grappling with a slump in iron ore and a tumbling share price, has taken aim at commodity forecasters.
“People who try and make a living out of predicting commodity prices have a really short life expectancy,” the founder of Australia’s third-largest producer said at a conference in Sydney on Tuesday, without listing individuals or banks. Commodity forecasts are unreliable, he said.
Iron ore sank to its lowest since at least 2009 this month as Rio Tinto Group and BHP Billiton Ltd. boosted output and commodities from oil to copper extended losses. Fortescue Chief Executive Officer Nev Power said last week that the Perth, Western Australia miner is capping its shipments as the market is fully supplied. Goldman Sachs Group Inc. and Citigroup Inc. are among banks forecasting further losses for iron ore.
“We’ll continue to ensure that Fortescue Metals Group is in the bottom 10 percent decile of operating costs in the world, so that no matter what happens Fortescue will stay an extremely competitive and strong company,” Forrest said.
Ore with 62 percent content delivered to Qingdao rose 2.1 percent to $53.45 a dry metric ton on Tuesday, the highest in three weeks, according to data from Metal Bulletin Ltd. Prices reached $44.59 on July 8, the lowest level in at least six years, and have lost 25 percent this year.
Fortescue cut its cash costs of production 35 percent in the year through June compared with the previous 12 months. The shares rose 2.3 percent in Sydney on Tuesday, paring their loss over the past year to 63 percent.