Everyone knows that something needs to be done to change the situation for the iron ore market. Most famous iron ore entrepreneur in the world articulates that iron ore production should be capped to recover the iron ore price.
According to The Australian Financial Review today, Andrew "Twiggy" Forrest has called on the world's big iron ore companies to announce publicly a cap on production in a bid to arrest declining prices, which have slumped more than 50 per cent over the past year.
At a business dinner in Shanghai on Tuesday night, Mr Forrest, founder of the fourth biggest iron ore exporter, Fortescue Metals Group, said he was "absolutely happy to cap my production right now" at 180 million tonnes.
He said the other major players, Rio Tinto, BHP Billiton and Brazil's Vale should also cap their production "and we'll find the iron ore price goes straight back up to US$70, US$80, US$90."
"I'm happy to put that challenge out there, let's cap our production right here and start acting like grown-ups," he said.
Iron ore prices slumped to below $US55 at the end of last week, the lowest level since at least 2008, when records began.
Mr Forrest said even China, which is benefiting greatly from lower commodity prices, is questioning why "we are ruining this market."
"You can see China thinking….it's really nice that we've got a low iron ore price but where does it go?" He said steel mills in China were concerned about eventually being left with only a few players to buy from as smaller iron ore producers would be priced out of the market.
"Competition is a really great thing," he said.
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