Andrew Forrest, chairman of Fortescue Metals Group (Fortescue), Australia's third biggest iron ore producer, has stated that prices for iron ore will not drop much more from their current level, which is their lowest level in 15 months.
Suggesting that iron ore prices have recently fallen as Chinese steel mills run down stockpiles, Mr. Forrest said that Chinese steel demand should pick up by the end of the year. He went on to say, "I don't think [the current price dip] will be part of a longer-term trend, I think it will bounce back," adding that the longer-term trend for iron ore will be down and iron ore will become a more and more affordable commodity.
Meanwhile, Fortescue Metals chief executive officer Nev Power said that Chinese steel mills were going through a period of destocking that, once completed, should see pricing and demand return.
''We are still selling all of the product that we are producing so there doesn't appear to be any major issues in that sense,'' Mr Power said. ''We might see a couple of months of some volatility but then we would expect strength to continue," he added.