Sydney, Australia — 20 March 2012 – Global mining giant BHP Billiton says Chinese iron ore demand appears to be flattening as the world’s second-largest economy slows down, but adds that it expects prices to hold up.
Revealing this here, BHP iron ore president Ian Ashby told reporters at an Australian mining conference that he was confident that China would meet its five-year economic growth targets, nevertheless iron ore demand would soon hit single digits if it was not already there, reports Fin24, quoting AFP.
China, the world’s largest consumer of raw materials, announced a growth target of 7.5% for 2012 “’ a marked downgrade from last year’s 9.2% growth and 10.4% in 2010.
The Chinese economy swung to a trade deficit of US$31.48 billion in February, according to the latest figures, with crude oil and other raw materials imports soaring while exports were further hit by weak demand in Europe and the United States.
But Ashby said he expected iron ore prices, now at around US$145/t, to hold at US$120 due to China’s own limited production, and BHP saw a solid future for the key steelmaking commodity in the longer term. “The pie is big and they are still growing their steel industry,” he added.
Rio Tinto said it also remained confident in the iron ore outlook in China.
“Although the rate of GDP growth in China is more immediately slowing we remain confident on the basis of the figures we have seen of a soft landing, with solid growth for this year,” David Joyce, Rio’s managing director expansion projects, told the conference.
Ashby said BHP was poised to respond to cooling demand but “we haven’t slowed down any of the work that allows us to make a decision”, adding that its iron ore expansion project was going full steam ahead.
Source: Fin24. For further details click here.