CNBC reported that even though the broader commodities rout seems to be ending, Andrew Mackenzie, chief executive of BHP Billiton Ltd. (ASX:BHP,NYSE:BHP,LSE:BLT), believes that the iron ore price is still faces some downside risk.
The iron ore price jumped a whopping 20 percent on Monday to hit $62.60 per tonne. Writing for Reuters, Andy Home explains what caused the rally, pinning it to the fact that “iron ore is following steel prices, which have also rocketed in China.”
Reuters reported that the iron ore price is enjoying its largest rally in years, with its gains outpacing those of both copper and nickel so far in 2016. However, forward prices are still weak, meaning the metal’s positive run may not last.
But some believe a rebound could take place in the next year or two.
Mining Weekly reported that Atlas Iron has ramped up production at its Pilbara operations four months ahead of schedule to 14 million to 15 million tonnes per year and lowered bash costs for the third quarter.
Rio Tinto, Vale and BHP Billiton all reported iron ore production increases in Q3, while steel demand from China and across the globe has continued to drop.
Fresh suspicion about a sale was likely caused by an uptick in the company’s share price.
Terramin holds advanced zinc and gold projects in Algeria and South Australia, while Atlas Iron is focusing on reducing costs at its iron ore operations.
Grange Resources is a magnetite producer, while Kazakhstan Potash is focused on two potash salt projects in Kazakhstan.
The operations of Alderon Iron Ore and Iron Ore Company of Canada are both facing uncertain futures as the iron ore price sinks.