In Commodity News 22/05/2015
West Australian premier Colin Barnett is confident iron ore prices will rebound from their record lows to above $US70 a tonne.
MR Barnett said the idea of a federal parliamentary inquiry into iron ore was flawed and urged Australia’s biggest iron ore producers to calm the market and stop talking about their expansion projects.
“We just need to adjust the production to the market,” Mr Barnett told ABC Radio in Perth on Thursday.
Mr Barnett said the iron ore industry had reached maturity in the most recent decade, with a doubling in local iron ore production which was now starting to level off.
“I’m reasonably confident that over the next 12 months or so prices will recover, not to where they were, but maybe back up to $70, $80, $90,” he said.
The premier, who is embarking on an asset sales program in the wake of weaker iron ore prices, said Chinese steel producers had been monitoring “every single word” of the recent national debate about iron ore and would like to see greater market stability.
The premier echoed his earlier criticism of BHP and Rio in March when he accused them of “offending” the Chinese by charging them top dollar at the peak of the iron ore boom.
“The major producers here have offended the Chinese over the last few years and Chinese don’t forget that,” Mr Barnett said.
The West Australian government had a good relationship with the Chinese, he said.
Federal opposition leader Bill Shorten has called on Prime Minister Tony Abbott to end speculation over an inquiry into iron ore.
Senator Nick Xenophon backs the concerns of smaller iron companies that bigger groups such as BHP Billiton and Rio Tinto are manipulating the market, sending the price down and impacting on the budget.
