BHP Billiton says iron ore demand in China will continue to decrease
Following Rio Tinto, the world's largest diversified resource company BHP Billiton also admitted that the decline in demand from China's attitude will continue. As announced yesterday, September 30, 2008 the quarterly period, BHP Billiton said that China's demand is expected to go soft, but the company has not cut signs of iron ore production during the third quarter also increased by 15%. In addition, CVRD also announced expansion plans for next year, said China still optimistic about long-term needs.
Yesterday, BHP Billiton said in its statement, China can not avoid the impact of the global economic slowdown, the third-quarter economic growth has slowed, is expected to keep short-term market turmoil, uncertainty will continue to exist.
However, as of September 30, 2008 in the third quarter, BHP's iron ore production has not diminished but rather increased by 15%; other copper production are basically unchanged from a year earlier. However, the same production of coking coal used in steel production declined by 4%, the output of thermal coal for power generation is also reduced by 4%.
BHP Billiton said that despite the short-term uncertainty, but in the long term, the company continues to believe that China and other developing economies, the current process of industrialization and urbanization will continue to push up the demand of major commodities, including aluminum, coal and nickel.
Last week, Australian mining giant Rio Tinto Another concluded the third quarter of 2008 when the first recognition of trend decline in demand from China will continue, said it would re-examine the current expansion plans, the attitude has lead to the collective global mining company's share price fell.
Prior to this, the Australian Mt Gibson Iron Ore Company (MountGibsonIronLtd) is revealed as iron ore market downturn, some Chinese companies requested a postponement of the second quarter of fiscal year 2009, shipments of iron ore time, this more further exacerbate the mining market, the market fears.
However, on the other side, another major mining company CVRD is still sticking to this agreement has been reached a long-term price for iron ore price increase, and hinted mill has accepted their request. The Chinese side made it clear that the current market conditions of China's steel companies can not accept any iron ore price increases.
Vale recently also announced its expansion of iron ore in 2009, market confidence can peep evident. Vale 2009 capital expenditure budget of 142 billion U.S. dollars, to expand and support the existing mine production and capacity expansion. Next year's investment budget will help the company in the next 5 to 7 years to achieve output of 450,000 tons of nickel, copper and annual production 1 million tons, annual output of 8.2 million tons of alumina, iron ore more than 500 million tons. Among them, iron ore next year, Vale's budget in almost 29 million.
The company said that despite the financial turmoil and the real economy is under attack, but the long-term metals and minerals market is still full of confidence. Even if the decline in consumption in Western markets, but emerging markets will continue to serve as the raw material needs of the future force, and therefore, long-term iron ore demand remains strong.
International iron ore prices have risen six consecutive years, Australia and Brazil respectively ore is up 410% and 376%, but in the third quarter, particularly since August, subject to production release, slowing demand and the international financial crisis, there are some important mineral price reduction trend in October fell to 85 in mid-Indian ore USD / ton, higher than the highest point in March 2008 decreased by nearly 60% more than 7 years, the international iron ore Spot prices for the first time below the long-term contract prices.
Long-term bullish for the global mining giant iron ore market point of view, the industry believes that should the economic downturn, weakened consumer demand, and China's economic development into the global imbalance adjustment to observe the larger context, this Global iron ore price adjustment period will be longer, weaker demand for China's means of production trends in the short term is difficult to end. (Source: First Financial Daily)
Related News: Rio Tinto BHP Billiton, said the acquisition of the company's rumors unfounded
Australian mining giant Rio Tinto said Wednesday that the rival BHP Billiton takeover of the company's rumors groundless.
Rio Tinto on the Australian Stock Exchange (AustralianStockExchange) in response to inquiries made after Rio Tinto shares rose 5.4% contrarian.
Australian market after rumors or Rio Tinto will consider the ease against the proposed BHP Billiton takeover approach. The acquisition value of about 70 billion U.S. dollars.
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