Macquaire joins the group to cut down iron ore

Author: Paul Ploumis
19 Jan 2015 Last updated at 07:25:13 GMT
LONDON (Scrap Monster): The last week, the bank stated that, it expects the average price of iron ore to reach 68 dollars per tonne in the year of 2015, and 65 dollars per tonne in the year 2016.

Like many other banks, Macquire has also stated that, the decline in the price of the commodity was due to increase in supply provided to the global market, by the three giant iron ore producers BHP Billiton, Rio Tinto, and also Vale.

Macquarie added that, rather than expecting that this particular displacement to come from the marginal operators, with slightly low capex and also high opex, the next cuts in the price, will be coming from more structural mining operations, which have been making iron ore at a rate of 50 dollars per tonne, just 18 months ago, or more in the cash margins.

The ban also added that, these producers will be forced to cut down the production, and that will be more like the balance sheet strength rather than the cost curve position, which will ultimately decide that who will survive and who will live.