BHP Billiton and Rio Tinto ready for iron ore’s ‘new normal’

Australia’s big two iron ore miners, Rio Tinto and BHP Billiton, believe the commodity will continue to be a “wealth generation machine for Australia” and expect volatility to recede, despite the heavy price falls in recent days, according to the Australian Financial Review.

Iron ore may be headed for $US40 a tonne after crashing through $45/t on Wednesday night, dropping more than 10% in a single day. But Rio and BHP say they are well prepared for the possible new normal in prices.

Xie sees iron ore rout extending into $30s on supply

The iron ore rout isn’t done yet and the raw material will extend declines into the $30s a tonne this year, according to Andy Xie, an independent economist who predicted a collapse in prices in February, according to Bloomberg.

Steel demand in China is shrinking while iron ore supplies are still rising, Xie, a former Asia-Pacific chief economist at Morgan Stanley, said in an interview from Hong Kong.

The slump in China’s stock markets, which showed a speculative bubble was bursting, was accelerating declines, according to Xie.

Could Andrew Forrest lose his billionaire status?

Andrew Forrest is edging ever closer to something previously considered unthinkable: losing his billionaire status, according to the Sydney Morning Herald.

The price of iron ore is being smashed and despite his best efforts, the value of Forrest's shares in his Fortescue Metals Group is taking a beating as well.