Iron Ore Prices

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Iron ore streak extends to six days
DANIEL PALMER BUSINESS SPECTATOR APRIL 24, 2015 10:03AM

The price of iron ore is trading near a one-month high after extending its run of sessions without a loss to six.

At the end of the latest session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US53.80 a tonne, according to numbers from The Steel Index, up 1.7 per cent from its prior close of $US52.90 a tonne.

The commodity’s best two-week streak this year has seen it soar 15 per cent from the 10-year low of $US46.70 a tonne it reached earlier in the month and has led it to its highest mark since March 27.

Helping drive the recent price recovery has been fresh stimulus from Beijing and the prospect of more moves in the pipeline, BHP Billiton’s decision to slow its planned expansion, albeit slightly, and surging oil prices.

Meanwhile, the debate over future iron ore demand has been heating up amid new criticism of BHP and Rio Tinto’s forecast that China’s steel production will peak at 1 billion tonnes next decade.

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MORETurning ore price brings fresh hope
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“It’s a number which has taken on a life of its own,” Clinton Dines, the head of BHP’s China business for 21 years until 2009, told The Australian Financial Review.

“Anyone with any nous would query it as a very nice round, convenient number. How could you ever forecast that?”

Mr Dines’ comments follow assertions from the World Steel Association that China’s steel demand may have already peaked.

However, hopes for further expansion have been boosted by Japanese conglomerate Mitsui, with the firm’s Australian boss expressing confidence China’s ongoing urbanisation will ensure a peak is still years away.

“China still has a lot of room to urbanise and further invest in infrastructure further,” Yasushi Takahashi said.

“In our opinion the peak will come later. Why we say that is that much more development is needed in many other cities and it will stimulate further infrastructure investment, which will lead to more steel demand.”

The debate is critical to the iron ore industry as it will dictate the capability of the market to handle as much as 300 million tonnes coming on-stream in the next few years.

Business Spectator

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Turning ore price brings fresh hope
THE AUSTRALIAN APRIL 24, 2015 12:00AM

Resources Reporter
Melbourne

Iron price chart.Iron price chart. Source: TheAustralian
The rebound in iron ore prices from 10-year lows has been a welcome one for the nation, inspired by improving supply and demand factors. These have spurred ­Chinese steel mills to start replenishing iron ore stockpiles they had let fall partly because they did not want to buy in a falling market in case prices went lower.

But there are few expecting a sustained run higher for prices for Australia’s biggest exports, with spot traders expecting the mills to again stand back from buying if prices head towards $US60.

On Wednesday night, BHP Billiton’s unspecified deferral of a small Port Hedland expansion helped accelerate buying from steel mills getting back into the iron ore market. This pushed prices 4 per cent higher to $US52.90, bringing to 13 per cent the gains since an April 2 low of $US46.70.

The run has been helped by Rio this week saying it shipped 10 million tonnes less iron ore in the March quarter than the previous one. It was set to continue last night after Brazil’s Vale, the world’s biggest iron ore producer, said it had done the same as Rio.

Both blamed weather, and in Rio’s case a train derailment, but there is a feeling the three big miners have taken the foot off the accelerator, or at least not sold as much as they could have, in response to prices that had fallen under $US50 a tonne. Even if BHP was the only one saying so.

On the demand side, April Chinese construction and infrastructure order surveys by Macquarie show steel requirements are starting to pick up after a slow start to the year, which has given mills the incentive to re-enter the market for iron ore, ensuring they don’t miss out on current cheap prices that are still down from $US81 at the start of the year.

The effect on the spot price of the miners’ restraint illustrates the small extent to which the growing spot market (where BHP and Rio now sell about 100 million tonnes of iron ore a year) can be driven by sentiment when commercial, rather than speculative, traders pick when they buy and sell. Given these are buyers who need product and sellers who have limited storage, the speculation rarely drives prices too far away from physical supply and demand factors.

This same small element of commercial trade speculation means some at the big miners think that buying will dry up as prices near $US60, with buyers well aware extra supply is coming on to the market from BHP, Vale, Rio and Gina Rinehart’s Hancock Prospecting.

But they also think steel mills will now see prices around $US46.70 as a bottom and time to buy, given the impact those sort of prices had in driving out production from Atlas Iron, Arrium and more Chinese producers.

Politicians who have watched their iron ore royalty and tax revenues disappear yesterday rejoiced in BHP’s move to slow production, even though the big miner has not said how slowly it will move and at the same time boosted 2014-15 production guidance by 5 million tonnes.

West Australian Premier Colin Barnett yesterday appeared ready to take some credit for the price rise, reminding reporters he had been calling for production restraint to bolster prices. “I haven’t said that directly to them (BHP) but I think they read the newspapers,” he said, before adding, when pressed, that he did not really think he had inspired BHP’s statements. Barnett hopes the price recovers to $US70 to $US90 a tonne but admits this could be optimistic.

Earlier in the month, Joe Hockey responded to Andrew Forrest’s calls for Australia’s iron ore miners to collude to cut production by saying the federal government did not support cartels. Yesterday, his relief at BHP’s move and the positive effect rising iron ore prices could have on his budget led him to declare common sense had prevailed.

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China yet to sate its appetite for steel, says Mitsui’s local boss
THE AUSTRALIAN APRIL 24, 2015 7:42AM

Rowan Callick

Asia Pacific Editor
Melbourne
VideoImage


China still hungry for steel: MatsuiYasushi Takahashi, executive chairman of the Australian arm of giant Japanese conglomerate Mitsui. Picture: David Geraghty Source: News Corp Australia

The executive chairman of the Australian arm of giant Japanese conglomerate Mitsui said yesterday that despite the collapse of iron ore and coking coal prices as supply has soared, the intensity of China’s steel consumption has still not peaked.

Yasushi Takahashi, the first Japanese executive to address Melbourne Mining Club, said that US steel intensity peaked in the 1970s and Japan’s in the 80s, when those countries’ urbanisation reached 60 per cent.

While “China is coming closer to that peak”, its urbanisation rate remains in the early 50s, he said. “There’s a lot of room for them to urbanise more … which will stimulate more steel demand.

“We’re constantly reshaping and upgrading our analysis of China.”

And India was behind China in that steel intensity curve, its demand still increasing.

But Mr Takahashi — whose corporation is Australia’s fourth- largest exporter — expected increasing consolidation in Australia’s mining sector as a result of the supply imbalance as Chinese growth slows: “Higher-cost producers will be compelled to exit the market, to be replaced by stronger suppliers.”

He said it was “difficult to temper suddenly the pace of iron ore production expansion in accordance with a short-term price change”, which he expected to continue through to the medium term.

Mitsui’s investments in Australia have totalled $14 billion in the past decade, with joint ventures in the resources field alone with companies including BHP Billiton, Rio Tinto, Anglo American, Santos, Wesfarmers and Woodside.

Mr Takahashi said recent developments in the country’s iron ore industry had included “extremely cost-effective expansions”, and “refurbishment of existing infrastructure to a sustainable level”.

But investment without consideration of cost effectiveness, just to increase capacity, would be unsustainable, he said.

Suppliers, he said, “can’t control or monopolise prices. We shouldn’t, don’t, and don’t intend to do that. But we do seek to shape the competitiveness of our joint ventures,” including through replacing diesel with gas for fuel.

The pace of demand growth was unprecedented over the last decade, he said, as China’s own steel production increased by the same amount as total global ­tonnage at the start of that period.

“Nobody had experienced that before. The industry tried to increase capacity notwithstanding whether it would decrease productivity” during this super-cycle.

Mr Takahashi, whose parent company’s assets are worth $138bn from the resources and ­finance industries, said as a result, mining had experienced “a sharp drop in both labour and capital productivity” — the former falling by 37 per cent over the decade.

“But we could enjoy record profits,” he said, “on the back of soaring prices. These rosy coloured times are over. Now we are left to fix the problem of deteriorating productivity.”

The answer, he said, was transformational innovation — shifting mining “from a conventional to a hi-tech industry.”

He said the free-trade agreement between Japan and Australia that came into effect on January 15 was intensifying Mitsui’s efforts to diversify its involvement in Australia, its biggest international investment target.

Although resources remains the core of Mitsui’s involvement in Australia, he said that agribusiness would be the chief beneficiary of the FTA, and Mitsui — the biggest importer of wheat into Japan — “will scrutinise all business opportunities” arising from the deal, especially in the farm sector. Mitsui — which opened its first office in Australia in 1901 — is also benefiting, he said, from the lower Australian dollar, both as an exporter and as an investor into Australia.

He said that Australia and Japan — the latter “heavily dependent on coal-fired power generation” — shared a common interest to promote such generators, especially to provide energy for emerging economies.

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Iron ore streak extends to nine days
DANIEL PALMER BUSINESS SPECTATOR APRIL 29, 2015 6:54AM

Iron ore has continued its march back toward $US60 a tonne in offshore trade amid rising hopes for more stimulus out of Beijing.

At the end of the latest session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US59.20 a tonne, up 0.9 per cent from its prior close of $US58.70 a tonne.

The gains extend a withering run for the commodity that has come as a surprise to many, with a surge of over 25 per cent from its 10-year low of $US46.70 a tonne earlier this month. Much of this recovery has come in the past nine trading days, with iron ore last seeing a red session on April 15.

The developments have allowed for a strong bounce in stock prices within the iron ore sector, with BC Iron and Fortescue Metals leading the way.

The two WA-based miners endured a rare negative session yesterday during the current iron ore streak, with stock in both firms sinking around 5 per cent by the close as the broader market moved lower.

Another lift in the commodity’s price overnight, however, leaves them primed to recover much of those losses during today’s trade.

Most analysts remain pessimistic about the ability of the current recovery to extend much further as a wave of new supply threatens to exacerbate an oversupply problem.

However, investors have been cheered by early signs of production cutbacks and a push to increase lending in China.

Reports have filtered through this week that China’s central bank will soon launch a credit-easing program similar to the long-term refinancing operations (LTROs) used by the European Central Bank. The move would be designed to stimulate lending, improve liquidity and potentially lift flagging growth in China.

Given China is the world’s largest customer for iron ore, the news is seen as a positive for demand of the commodity.

Meanwhile, the Department of Industry and Science in Australia has reiterated its $US60 a tonne forecast for 2015 as it looks beyond short-term fluctuations.

“We’re happy to stick by the $60 in the near term as an average price,” the department’s chief economist, Mark Cully, said yesterday.

“We see the current price being driven by market sentiment rather than fundamentals.”

The update follows a suggestion earlier this month from Joe Hockey that Treasury may opt to use a bearish $US35 a tonne forecast for the upcoming budget.

Business Spectator

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Iron ore rebounds but outlook remains grim
THE AUSTRALIAN MAY 28, 2015 12:00AM

Matt Chambers

Resources Reporter
Melbourne
A recent rebound in iron ore prices has done nothing to sway the downbeat outlook from forecasters, with Atlas Iron declaring lower price assumptions will see it write $130 million to $160 million off the value of development assets, and Citi slashing its long-term forecast to $US55 a tonne.

The Atlas writedowns come after the company this month survived the dual pressure of low prices and a highly geared balance sheet by striking plans to raise $180m of equity and agreements with contractors to lower operating costs to let it restart its suspended West Australian mines.

Yesterday, Atlas stressed the non-cash writedowns would not impact covenants on loans, which require Atlas to maintain a ratio of total assets to secured debt of more than two times.

“The asset impairment represents a reduction of about 15 per cent in the carrying value of Atlas’s total assets,” the company said. “Following the expected impairment, the ratio will be about 2.38-2.45 times.”

The impairments will be mainly on the undeveloped McPhee Creek project, which Atlas acquired in 2011 in its $828m scrip and cash takeover of Giralia Resources.

“While McPhee Creek is an important part of Altas’s Pilbara project portfolio, it is currently not earmarked for development as part of the company’s near-term strategy,” Atlas said.

The price assumption used by Atlas was an undisclosed one based on forecasts by consultants CRU, Wood Mckenzie and Metalytics.

Iron ore prices have had a small resurgence recently, with prices having climbed from a decade low of $US46.70 a tonne on April 2 to close at $US62.10 on Tuesday night, though they are still well down from the $US135 level at the start of 2014.

Despite this, Citi yesterday slashed its previous long-term forecast of $US81 (one of the more bullish among forecasters) to $US55 a tonne.

“The iron ore market is unusual in two respects,” Citi said. “The first is that global demand is expected to decline over the next decade, meaning there is no need for net supply additions. Second, the extremely low cost expansion options of the largest producers allow them to grow production even as the vast majority of producers face financial distress.”

Atlas shares have been in suspension since April 7.

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Iron ore climbs past $US62 mark
BUSINESS SPECTATOR JUNE 03, 2015 7:53AM

The price of iron ore has again moved beyond $US62 a tonne as investors welcome steady data out of China and Anglo American talks up demand from India.

At the end of the latest session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US62.10 a tonne, up 1.1 per cent from its prior close of $US61.40 a tonne.

After breaking a two-session losing streak the commodity is just US50c off the near three-month high it set last week and 33 per cent above the 10-year low of $US46.70 it reached in early April.

The price has been recovering on falling stockpiles at Chinese ports and a view the late-March, early-April sell-off may have been an overreaction to a broadly pessimistic view of the future supply-demand outlook.

Helping market sentiment has been steady data out of China as factory activity numbers, released on Monday as iron ore markets remained closed, were shown to be improving, while house prices were shown to be climbing in data released yesterday.

China is the world’s largest iron ore consumer and the demand outlook in the region is key to the commodity’s price given the wave of supply expected to hit the market over the coming 12-24 months.

While China is the key to the market in the near-term, miners are hopeful India is the sleeping giant as it presses ahead with an urbanisation drive.

The major miners have spruiked the potential of the Indian market, with Anglo American overnight detailing the potential in declaring its sales to the country have tripled in the past year.

Anglo, the world’s fifth largest ore producer, now directs 15 per cent of its iron ore production to India.

Meanwhile, BHP Billiton’s iron ore boss, Jimmy Wilson, has launched another stern defence of the miner in the face of continued criticism from the likes of Fortescue Metals over its production plans.

“BHP is not oversupplying or flooding the market,” he said in an op-ed for The Australian.

“Our strategy to increase production through productivity remains commercial, rational and consistent.”

Business Spectator

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Iron ore locked out of China property party

Vanessa Desloires and Angela Macdonald-Smith
505 words
4 Jun 2015
The Australian Financial Review
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English
Copyright 2015. Fairfax Media Management Pty Limited.

The iron ore price is likely to come under further pressure in the second half of this year, despite improved confidence in China's key property sector, UBS analysts say.

Policy measures implemented in the past six months in China have lifted sentiment in the property sector, which has been a key source of demand for the bulk commodity, but are likely to result in increased levels of apartment fit-outs rather than new builds, UBS senior resources analyst Glyn Lawcock said on Wednesday.

Mr Lawcock, who has returned from a visit to China with fellow UBS analysts, said the latest data showed property sales had risen 37.4 per cent compared with May 2014.

"But there is a large property overhang. Some tier-two and tier-three property markets have an inventory of 12 to 36 months," he said.

As a result, it will be the base metals and materials used in pigments and tiles such as mineral sands that will benefit, because 85 per cent of property in China is built as a shell.

Meanwhile, the outlook in China was "bearish" for iron ore and metallurgical coal, which are used to make steel, Mr Lawcock said.

Iron ore prices rose 1.9 per cent overnight on Wednesday to $US63.02 a tonne, building on gains from late April, when BHP Billiton announced it would slow its production growth rate. In April, iron ore was fetching as little as $US47 a tonne.

But the renewed strength in iron ore prices would be short-lived, Mr Lawcock said. UBS is maintaining its April forecast for the price to return to $US48 a tonne in the second half of 2015.

"The second quarter in China is seasonally a stronger period, when construction activity picks up again, but it's picked up at a time when Rio's had some issues with their shipments ... there has been no growth, and we're getting that tightness emerging at the moment," Mr Lawcock said.

China's daily steel production rate slowed to 1.78 million tonnes (mt) in May, from 1.79mt in April, while iron ore inventories at Chinese ports increased marginally to 78.4mt.

"Rio Tinto will start ramping up its 360 program ... Roy Hill will come on in the latter part of the year. There's continued supply and low-cost supply, and if you don't get any consumption growth, you're flattening the cost curve," Mr Lawcock said.

He also noted that while he observed a lift in Chinese sentiment compared with his previous visit in November 2014, sentiment in the country largely reflected current conditions rather than being forward-focused, and could change rapidly.

RBC Capital Markets analyst Fraser Phillips' outlook is similar. He wrote in a note that while "low inventories and Chinese economic stimulus could provide some near-term support, we believe the longer-term fundamentals remain challenging given increasing supply from global miners".


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Iron ore miners win reprieve but sense of foreboding lingers
THE AUSTRALIAN JUNE 13, 2015 12:00AM

Barry FitzGerald

Resources Editor
Melbourne

Heavy machines move iron ore at the dock in Rizhao in eastern China’s Shandong province. Source: AP

In the past 10 weeks, there has been a $20 billion turnaround for the better in the fortunes of iron ore producers, thanks to rallying prices for the steelmaking raw ­material.

For higher-cost producers such as Atlas, it has been a godsend, ­allowing a healthier backdrop against which the company can now confidently raise $180 million and keep the threat of going into administration at bay.

For a not so high-cost producer such as Andrew “Twiggy” Forrest’s Fortescue it means the ­window of opportunity for an early fix to its debt load — by selling a stake in its operations to Chinese interests — remains open, if it so ­decides on such a course.

And for the heavyweights of the Pilbara — Rio Tinto and BHP Billiton — the rebound in prices has deflated Twiggy’s attacks on their iron ore expansion policies in the face of the resource’s ­retreat from the elevated levels of recent years.

But all is not calm in the sector. The doomsayers are out in force, warning the uptick in prices will be short-lived, meaning the industry’s drastic cost-cutting strategy remains a priority. Survival for the higher-cost producers remains the name of the game.

The rebound in prices has been remarkable, and while far from convincing, the prospect of prices holding at the higher levels would be warming for Canberra in terms of tax receipts, and for the Barnett government in Western Australia in terms of royalties.

Iron ore started the calendar year at $US71.20 a tonne and sank to a low of $US46.70 a tonne on April 2, according to The Steel Index. It has since rallied to $US65.40 a tonne.

The gain of $US18.70 a tonne translates to $24.20 a tonne at the present — and potentially weakening — exchange rate. Across forecast exports this year of near 800 million tonnes, the annual revenue difference would be close to $20bn — if sustained.

The revenue boost, along with savage cost-cutting by the industry in response to the crash in ­prices from the $US100-plus of ­recent years, means all Australian producers are now comfortably ahead of break-even.

According to UBS, the higher-cost producers — BC Iron, Atlas, Arrium, the Australian operations of Cliffs, Mount Gibson and Grange — are clustered around break-even costs of between $US48 and $US52 a tonne.

Lower still comes mid-cost ­producer Fortescue ($US44 a tonne) and Gina Rinehart’s yet to produce 55 million tonne-a-year Roy Hill mine ($US41 a tonne).

Then there is big downward shift to UBS’s estimate that Rio and BHP have all-in cash break-even costs (including interest) of $US30 and $US29 a tonne ­respectively.

The effort put into slashing the over-the-top costs baked on ­during the better times of $US100 a tonne-plus iron ore (iron ore hit a record $US191.90 a tonne in ­February 2011 on STI figures) serves up a double benefit to iron ore’s ­recent price rally.

BHP chief executive Andrew Mackenzie told The Weekend Australian’s Beijing correspondent, Scott Murdoch, that that was the real “good news’’ for the industry and it was “still all to play for’’.

Potentially at least, it means bigger margins can be secured, even in a more depressed iron ore price environment.

“Along with others, (we) are ­actually reducing the cost of ­production. It is more about a cost-competitive position becoming even more cost competitive — and that actually being applied to a rising volume of exports,’’ Mr Mac­kenzie said.

BHP marketing president ­Arnoud Balhuizen told Murdoch price increases for iron ore clearly reflected restocking by the Chinese steel mills. “It is actually very healthy at the moment, “ he said.

But Mr Balhuizen warned “there’s more than enough supply, and there will be more supply come in to the market.’’

Mr Mackenzie said the combination of supply growth and the slower growth rate in China would tend to drive prices down.

That is also the underlying theme of the raft of reports from major investment houses in recent weeks in response to the rally in prices. All warn the rally could be overdone and shareholders should prepare for a setback as new supply hit the market, most notably with the start to ­production at Roy Hill.

Goldman Sachs encapsulated the sense of foreboding this week in a note to clients when it said the price rally was self-defeating.

“The current rally provides some welcome breathing space to marginal producers; spot prices are currently trading slightly above our $US60 a tonne estimate of marginal production cost ­(inclusive of sustaining capital and overheads), and some mines previously flagged for closure are restarting once again.’’

“However, the market outlook remains unchanged. In our view, prices must fall below the cash cost of marginal producers in order to force the mine closures required to balance the market.

“On that basis, high prices that partially reverse the process of slimming down the industry cost curve can only result in additional closures down the road. Therefore, we think this rally is living on borrowed time,’’ Goldmans said.

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Analysts tip iron ore at $US50 a tonne
AAP JUNE 23, 2015 2:23PM

Iron ore prices are tipped to fall to around $US50 a tonne in the second half of the year because of weak steel demand and increased supply from Australia’s big miners.

The steelmaking commodity is trading at $US60 a tonne, down 2 per cent from last week, but prices are still up almost 40 per cent since the start of April.

The price of Australia’s biggest export earner recently hit a five-month high of $US65 a tonne which has been attributed to supply disruptions and stronger seasonal demand.

Chinese iron ore port inventories have fallen 20 per cent this year, but ANZ researchers believe the trend will reverse soon and lead to lower prices.

ANZ predicts the price will fall to $US53 over the next three months and stay below $US60 a tonne next year.

“We’re still seeing supply growth coming through in the market,” ANZ senior commodity strategist Daniel Hynes said.

“Roy Hill’s coming through and BHP and Rio have still got incremental gains from their expansions and Vale in Brazil has some expansions coming thorough so the supply side is still seeing growth and this against a backdrop of relatively weak demand.”

Mr Hynes does not expect to see an infrastructure-led recovery in China which has previously boosted iron ore prices.

House prices in China have recently been stabilising but construction activity has remained muted, meaning demand is expected to remain weak.

Investment Bank Citi forecasts the iron ore price will fall to $US48 a tonne in the third quarter and as low as $US38 in the fourth quarter.

Despite making a slight upwards revisions for its third quarter prices, Citi says it remains bearish on iron ore largely because of supply coming from Australia’s biggest mining companies.

“The key driver of this price decline is the continued acceleration in low-cost supply from Australia as Rio Tinto completes the expansion to 360 million tonnes per annum and Roy Hill is commissioned in late-2015,” Citi says.

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Rio Tinto’s Sam Walsh lashes iron ore critics, urges less gloom
DOW JONES JULY 02, 2015 7:29AM

Rio Tinto CEO Sam Walsh accuses critics of fuelling a crisis of confidence Source: News Corp Australia

Rio Tinto chief executive Sam Walsh has maintained his war of words with critics who have attacked the mining giant and others for overproduction of iron ore.

Mr Walsh, as he has in the past, rejected calls to rein in production of the steelmaking ingredient.

“In times of economic uncertainty, it might sound seductive or comforting to want to put up the barriers, but we must keep markets and trade open,” he told an audience of mining executives at a London event.

Iron ore prices overnight tumbled to $US58.90 a tonne, after earlier this year briefly dipping below $US50 a tonne, from highs of about $US190 a tonne reached in 2011, a surge that sent miners around the globe on a binge to produce more. In the past few years, as a property and construction boom in China fizzled, demand for iron has dropped off even as production has leapt ahead.

Rio Tinto (RIO) produced 234 million tonnes of iron ore in 2014, up from 209 million tonnes in 2013 and 199 million tonnes in 2012.

Critics such as Ivan Glasenberg, chief executive of Swiss mining giant Glencore, have said major iron ore producers such as Rio and BHP Billiton have helped crush prices by ramping up production even as demand from China has tapered off. At an industry conference in Barcelona in May, Mr Glasenberg said miners are suffering a “crisis of confidence” as mining giants oversupply markets regardless of demand.

Mr Walsh fired back overnight, saying that some critics “have called it a crisis of confidence and talked themselves and others into a gloom.” He said such talk “risks becoming a negative feedback loop” that “feeds public anxiety about our industry’s crucial role.”

Instead, Mr Walsh struck a more optimistic note. He predicted that demand for commodities is poised to grow sharply as India’s population overtakes China’s and Africa’s population doubles. And while China’s growth is slowing, its economy is expected to grow “more in the next 10 years than it has in the past 25 years,” he said.

Mr Walsh sounded a decidedly bullish note on copper, noting that fully electronic cars use four times the amount of copper that a conventional car uses. “The industry faces a supply gap of four to six million (tonnes of copper) per annum within a decade,” he said. “The demand signals are strong and clear.”

Copper hit a five-and-a-half-year low of about $US5,400 a tonne in January. While it has rallied since, partly due to signs of slowing production in Chile, it remains under pressure amid concerns about Chinese demand, recently trading for about $US5,770 a tonne on the London Metal Exchange.