Iron ore price constrained by output surge

BHP Billiton's marketing boss Mike Henry says iron ore prices of less than $US100 are the new norm, and the mining giant has incorporated that forecast into its plans, according to the Sydney Morning Herald.

Henry said the iron ore price was unlikely to rise above $US100 for a sustained period, because at that threshold a lot more fresh supply is incentivised to market, which would in turn push prices back down.

“Could you see iron ore back up over $US100? For a short period of time, possibly, yes,” Henry said.

Disagreement over resources blacklist continues

The London-based provider of software tools used by consultants to Australian National University to blacklist seven resources stocks says the companies’ rankings may go up or down after they provide additional information, according to the Australian Financial Review.

“Future reviews will take account of any new information that becomes available,” said Peter Webster, CEO of EIRIS, which licenses its socially responsible investing research tools to Canberra consultant CAER.

“Any new information will be assessed on its merits and it should not be assumed that it will automatically lead to an improved rating for any company,” he said.

BHP, Rio Tinto not anti-competitive: Sims

Rio Tinto and BHP Billiton are not being anti-competitive with their plans to rapidly increase iron ore production in a depressed market says Rod Sims, the chairman of the Australian Competition and Consumer Commission, according to the Australian Financial Review.

Sims said gaining market share was not wrong, even if it was at the expense of smaller rivals.

“The ACCC does not have any indication of anti-competitive behaviour,” he said.

Western Australian Premier Colin Barnett suggested last week BHP and Rio were “acting in concert” to flood the iron ore market with new supply and push out higher-cost suppliers with their expansions plans.