BC Iron’s Young expects China to loosen monetary policy
BC Iron md Mike Young said he expects the iron ore market to pick up after the expected change in China’s leadership later this year frees the country’s government to take more action to stimulate the economy.
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Iron ore prices have sunk below $90 per tonne on a 62% Fe basis as China’s steel market struggles with a slump in demand.
“Following the election of China’s next premier, you will see a loosening of monetary policy and systematic stimulus,” Young said in the Australian iron ore junior miner’s financial results for the year to June 30, 2012, released on Tuesday September 4.
“It is no secret that China wants slower, but sustainable growth,” he added.
“Obviously, the iron [ore] price has everyone a little nervous at the moment. As a price taker, we watch but cannot affect prices. What we can do is closely monitor our production costs to maximise our margins,” he said.
BC Iron posted earnings before interest, taxes, depreciation and amortisation (Ebitda) of A$68.8 million ($70.6 million) for the year ended June 30, up from a loss of A$1.4 million a year earlier.
Profit before tax stood at A$60.8 million for the 12 months, compared with only A$0.9 million for financial year 2011.
BC Iron’s Nullagine mine, a 50:50 joint venture with Fortescue Metals Group, reached its production target of 5 million tpy in June.