In a particular episode of The West Australian’s new monetary video present Trading Up, we take a look at WA’s high export, iron ore — and discover how lengthy the nice occasions will roll.
The purple dust within the Pilbara area is the monetary gasoline that makes WA’s economic system the envy of the world.
The State Government’s current mid-year evaluate revealed that iron ore royalties contributed greater than half of the $2.2 billion in extra income now anticipated to move into Treasury coffers this yr.
But how lengthy can China’s demand for the steel-making commodity proceed and when will we see the value of iron ore begin to fall?
Investment financial institution UBS just lately downgraded mining giants BHP and Rio Tinto, warning iron ore fundamentals had been weak.
UBS expects the iron ore value to sit down between $US75 and $US80 a tonne subsequent yr. The value is presently sitting round $US112/t.
But even at a cheaper price, the foremost miners will nonetheless be making a wholesome revenue they usually proceed to put money into future mines as they count on the nice occasions to roll for years to come back.
