BHP Billiton warns markets to brace for lower iron ore prices
Sydney — BHP Billiton is detecting a slowdown in the effect of Chinese government stimulus, the prime catalyst for the commodities sector rebound in 2016, and warns markets should brace for lower iron ore prices. "We’re seeing a moderation of the impacts of the stimulus which China was putting into its economy in 2016," while new low-cost iron ore is also being added to the export market, chief financial officer Peter Beaven said on Thursday in Sydney. "We have got to be very cognisant that those fundamentals point to a softening, and our business and all the settings that surround it, have to be ready for a much lower iron ore price." China’s spending on infrastructure including roads, airports, ports and railways, rose 17% last year, driving the country’s 6.7% expansion in the economy. Growth in infrastructure spending is forecast to slow to about 3% by 2027, according to Bloomberg Intelligence Economics.
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