In another sign that the investment mining boom has ended BHP CEO Andrew Mackenzie said yesterday in Adelaide that, “Our company has been very clear that the time for massive expansions of iron ore are over.”
That doesn’t mean that BHP, amongst others, are not still ramping up production, but it sounds very much like a message to the market that the recent acceleration in the pace of iron ore might be overdoing it.
Price’s this week fell below $70 a tonne for December delivery on the 62% Fe, Chinese Swap contract and drove December 2016 prices below $65 tonne.
In response Mackenzie said, “at these prices, we still have a very decent business. We’ve been fairly clear that prices at about these levels were what we were expecting for the longer term.”
That is another signal to traders that BHP thinks prices are about right now.
We’ll see where things go longer term but last night the Dec contract rallied 69 cents a tonne to $70.01 a tonne.
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