Iron Ore Seen Supported Above $110 by China, Fortescue Says
Prices will stay between $110 a ton and $130 a ton in the short to medium term, Chief Executive Office Neville Power said in an interview on Bloomberg Television today. The break-even price at Australia’s third-biggest exporter is “in the low $70 per ton,” he said.
Iron ore entered a bull market last month as China replenished stockpiles. While the country’s expansion slowed to 7.5 percent last quarter from 7.7 percent in the previous three months, data this month showed pickups in trade, manufacturing and industrial output. China will reach the government’s 7.5 percent growth target this year and maintain that pace in 2014, a Bloomberg survey of economists indicates.
“We see it continuing strong and growing at that 7 to 8 percent for the foreseeable future,” Power said, referring to the expansion of the Chinese economy. Growth of 7.5 percent “is a very, very strong underlying growth number,” he said.
Iron ore with 62 percent content delivered to the Chinese port of Tianjin declined 0.9 percent to $137.80 a dry ton yesterday, according to The Steel Index Ltd. Prices have rallied 25 percent since falling to a seven-month low in May, averaging $135.49 since the end of last year.
To contact the reporter on this story: Phoebe Sedgman in Melbourne at email@example.com
To contact the editor responsible for this story: Jake Lloyd-Smith at firstname.lastname@example.org