Iron ore prices are down sharply from a high of nearly $200 a tonne in 2011 to $52.10 as of Wednesday. The price is forecast to drop to $50 over the next two years, according to a recent Reuters poll
Iron ore miners have been on a drive to lower their iron ore production costs to close to $10-$15 a tonne to keep ahead of the deterioration in pricing.
BHP, which posted quarterly output of 61 million tonnes, plans production of 247 million tonnes in the year to June 30, 2016, up 6 percent on a year earlier, ranking it behind Vale and Rio Tinto .
Vale this week said it produced a record 88.2 million tonnes of iron ore in the September quarter, just ahead of Rio Tinto, and would also continue to increase output.
Vale’s CEO estimates China is currently producing between 180 and 190 million tonnes of grade-adjusted iron ore per year, down from 240 million tonnes in 2014
“BHP Billiton remains on track to meet full-year production and cost guidance after a solid operational performance this quarter,” Chief Executive Andrew Mackenzie said in the report, ahead of the company’s annual meeting in London on Thursday.
At its projected iron ore production rate, BHP will retain its world number three ranking in output and exports of the steel-making commodity, which accounts for more than half its revenue and profits.
China is mulling the 13th five-year plan, which will chart its reform and growth path, when the country is entering a “new normal” of slower growth and boosting re-balancing towards consumption and services.
The new five-year period from 2016 to 2020 will be key for reforms, which can facilitate economic growth, including reforms on tax and fiscal policy, state-owned enterprises and finance, according to China International Capital Corporation (CICC), one of China’s leading investment banks.
Leaders of the Communist Party of China (CPC) met in Beijing on Monday for a four-day meeting to discuss changes, while the fifth plenary session of the 18th CPC Central Committee will review proposals for the five-year plan. After taking into account the proposals, a final plan will be ratified by the annual session of China’s top legislature in March 2016.
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