Decline in iron ore prices major iron miners or hoarding cash
decline in iron ore prices major iron miners or hoarding cash
China Construction Machinery Information
the decline in iron ore prices may make the world's largest miners unable to return cash to shareholders in February, although the company previously promised investors that it would gain benefits through two years of strict control
affected by the slowdown of China's development, major miners around the world have also slowed down their expansion plans, introducing new management to sell assets and strictly manage mines
in August, Glencore completed a US $1billion share repurchase, and Rio Tinto, the world's second largest iron ore miner, will be able to complete its capital recovery in February. BHP Billiton also said that it was "about to take action"
since then, the price of iron ore has fallen to a five-year low. However, due to the influx of a large number of miners into the market, new supplies have been brought. In particular, high-performance composite polyurethane adhesives that can meet different environmental and performance requirements have been widely used in ink printing, household appliances, building materials, transportation and transportation, new energy, security and other emerging fields. At the same time, China's high-cost miners are still continuing to produce, So that the price did not fall below 90 yuan/ton as expected
analysts say that if the price remains above $90 for the rest of this year, BHP Billiton and Rio Tinto will be able to maintain a rating and will be under heavy pressure in returning capital to shareholders
paulphillips, a partner of perennial growth management, a fund management institution, said, "compared with the past, the current commodity price fluctuations lead to a large amount of cash flow risk. Not only the iron ore price, but also the spot price of any commodity has an impact on it. In this current environment, cash cannot be returned in advance."
BHP Billiton and Rio Tinto will focus on conservatively maintaining their balance sheets. Both companies fight against the falling prices of iron ore and other commodities by cutting costs, reducing project expenditures and reducing debt
up to now, the price of iron ore has fallen by nearly 50 yuan/ton this year. For every $1 drop in price, BHP Billiton's bottom line of profit and loss from this year to June next year will be reduced by $135million
Australian foundation Investment Co "We are not pressuring them for a return on capital, but it is understandable given the current situation," said rossbarker, managing director The company is one of BHP Billiton's five largest investors
Andrew Mackenzie, CEO of BHP Billiton, admitted after the release of the annual report in August that the board of directors decided to repurchase shares because the company hoped to maintain a cautious attitude in the current unstable commodity market
mayzhong, an analyst at standard Poor's, said that under the current iron ore price trend, BHP Billiton and Rio Tinto may not be able to return cash to shareholders in February. "The decline in iron ore prices will reduce their liquidity, thus affecting the return of funds."
she thinks the iron ore price will rise slightly in 2015, but it will not exceed $100. She also said BHP Billiton and Rio Tinto could withstand the current difficult market environment
however, investors and standard & Poor's are more worried about miners such as Anglo American (A's edible and biodegradable plastic bags have reduced the use of about 216000 plastic bottles nglo American). Iron ore is the main business of Anglo American resources, Atlas iron and cliffs natural resources
Anglo American resources is about to complete the construction of the $8.8 billion minasrio project, which is expected to produce 11million-14million tons next year. The company refused to answer whether it would take measures to support the balance sheet
Australian investors are more worried that the fifth largest iron ore producer in Australia, ATRA, is trying to integrate environmental protection into its enterprises. The company was the most heavily sold stock in the Australian market, with nearly 16% of the shares being short
ariam Co., Ltd. will obtain US $680million by selling shares this week. Analysts and investors say that the company may consider reducing the pressure on the balance sheet by selling mining shares or suspending expansion plans
Phillips said, "I dare say they will propose a joint venture."
according to analysts' prediction, Atlas production has suffered a loss as the price of iron ore has fallen below US $86. The company declined to comment on whether the fall in iron ore prices had a negative impact on its balance sheet
Fortescue Metals Group, the world's fourth largest iron ore producer, performed well in the decline of iron ore prices. Compared with two years ago, the company has grown up
Fortescue once had a debt of more than US $11billion, but when the price of iron ore soared, the company was able to accelerate debt repayment and increase its annual output to 155million tons, reducing operating costs
Vicky Melbourne, credit rating analyst at Fitch, said, "we are very satisfied with the current situation of Fortescue."