Speaking at Mines and Money Hong Kong yesterday, Ball acknowledged it was tough times to be an iron ore producer and BC was keeping its “head above water” at these prices.
 
“We’re waiting to see what the next three or four months bring,” he said.
 
Ball said the drop in the price tended to be an overreaction on a single data point rather than a true reflection of the supply and demand situation.
 
But there is little doubt the iron ore market is in oversupply to the tune of around 100 million tonnes, according to CLSA head of resources research Andrew Driscoll.
 
"The iron ore price is being set by the need to force sufficient supply exits to rebalance the market,” Driscoll said.
 
“What is the price that needs to force these closures?”
 
Driscoll said like the coal industry, many producers were underwater already.
 
“Often business decisions aren’t influenced as much by economic rationale as what you’d want them to be,” he said.
 
It comes after Bloomberg Intelligence global head of metals and mining research Ken Hoffman slammed the majors on Monday.
 
“Until they can be grownups and come to the table and perhaps even cut production, the bad times will continue,” he said.
 
Driscoll said around 40Mt of Chinese domestic supply had exited the market in the second half of 2014.
 
“Perhaps there’s another 20 or 30 million tonnes to go,” he said.
 
CLSA is also looking for exits by non-traditional supply sources like Malaysia and Indonesia, as well as traditional supply sources like Australia.
 
Ball said the Australian juniors had surprised the market by how much they could cut costs.
 
“It comes down to each producer being as resourceful as possible,” he said.
 
"Our intention is we won't be one of the ones coming out of the market."