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BHP says days of US$100 iron ore prices likely over
[SYDNEY] The world's biggest miner BHP Billiton says iron ore prices are unlikely to rise above US$100 a tonne again as the commodity trades at five-year lows amid a supply glut and weak Chinese demand.
Iron ore prices have slumped some 40 per cent this year as output from resources giants such as BHP, Rio Tinto and Brazilian mining powerhouse Vale increases, hurting higher-cost producers.
A year ago, iron ore fetched about US$135 a tonne, but it is now below US$70.
"I've learnt never to say never, and I think that there's... always short-term variations," the miner's iron ore chief Jimmy Wilson told reporters late on Thursday.
"But, you know, I think that if you use basic economics and look at inducement pricing... certainly, you know, US$100 feels high going forward."
The comments came as BHP marked the Anglo-Australian firm's shipment of its one billionth tonne of iron ore to China. BHP shipped its first iron ore from Port Hedland in Western Australia to China in 1973.