Aussie miner Fortescue begs to differ (previous), CEO Nev Power saying metal oversupply and low...


Aussie miner Fortescue begs to differ (previous), CEO Nev Power saying metal oversupply and low prices are a temporary blip. He spoke as his company reported better-than-expected H2 profits. "There is a boom and it's continuing and those volumes will continue in the future," says the always confident Power. Shares -1% in Sydney.

Comments (3)
  • Paulo Santos
    , contributor
    Comments (34977) | Send Message
     
    The volumes will continue, the prices won't. But he couldn't say anything else, as if prices continue plunging everybody will be afraid that his company might go belly up.
    22 Aug 2012, 11:46 PM Reply Like
  • lostalloncoal
    , contributor
    Comments (373) | Send Message
     
    Paulo, you are saying demand and supply mechanism does not hold true here. Back in the days, oil fell around $30 and world was supposed to not need oil anymore. Look like oversupply is killing prices and prices will recover. It has happened in every commodity sector from sugar to oil, copper to ore. This has happened many times in past. Not sure what has changed so much.
    23 Aug 2012, 12:26 AM Reply Like
  • Paulo Santos
    , contributor
    Comments (34977) | Send Message
     
    No, I'm saying that the investment in supply was so large that it can't handle stagnated demand without the price of iron ore plunging.

     

    Although at first there will be uncompetitive high-cost supply being killed, there's a lot of lower cost capacity coming online as well. BHP said as much, the cost curve will be flatter and the price will be lower because of it.
    23 Aug 2012, 07:12 AM Reply Like
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