The State's iron ore bosses say they are sanguine about the outlook for commodity prices despite falls that have wreaked havoc on the market value of Australia's mid-tier mining stocks.
The benchmark iron ore price for 62 per cent product has not been above $US120 a tonne since mid-February. Since the end of March, iron ore stock values have also tumbled, with Fortescue Metals Group off 15.6 per cent, Mount Gibson Iron down 18.7 per cent and Atlas Iron and BC Iron both down 25.6 per cent.
BHP Billiton's diversified portfolio made it the only producer to register a gain since the start of April but iron ore boss Jimmy Wilson said yesterday the flood of extra tonnes into the market had contributed to weaker prices.
"If we look back at this year and last year, demand has increased in the region of 60 million tonnes a year but at the same time supply has increased 120mtpa," he said.
"We've been saying this for a long time, as have all the other companies, the cost curve will flatten. We are price takers, not price makers."
BC Iron managing director Morgan Ball said he believed the price would return to between $US100/t and $120/t but volatility would continue. Moves by some major China steel industry players belied any suggestion support for WA's iron ore sector was on the wane, he said.
"Everyone is talking about the iron ore price but the culture that has a really long-term view of life is suddenly getting a bit excited in the iron ore space," Mr Ball said. "We've seen the Baosteel offer, you hear talk of CITIC down in the Mid West and the Esperance Port expansion is starting to look like it has some legs.
"I think what that means is that we're looking too short term in relation to the iron ore price."