August 05,
FORTESCUE Metals is forecasting that Iron ore prices could drop almost 25% in the September quarter due to falling Chinese demand.
It is said that the price fall is not linked to China’s economy running out of steam or the recent move to quarterly pricing based on spot prices. It is just the play of normal supply & demand.
FORTESCUE’s chief executive Andrew Forrest says the fall is not overly concerning. “Whether it’s US$80 or US$120, it’s still a price where the Iron ore industry can grow.” He also said demand would remain strong while the Chinese Government continued its program of modernization.
Commenting on the Government’s proposed mineral resources rent tax he said it would make Australia uncompetitive as an investment destination whereas Canada, New Zealand and Uzbekistan become more appealing when it comes to taxation policy.
Mr. Forrest said FORTESCUE had been offered Iron ore projects all over the world but would reject those offers in the hope that the Government did not implement the MRRT.
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