Australia’s Treasurer Joe Hockey plans to discuss iron ore demand with his Chinese counterpart after rising output from BHP Billiton Ltd. and Rio Tinto Group helped drive the metal’s price below $50 a metric ton this month.
Australia, the world’s biggest supplier, is contemplating a price as low as $35 in next month’s budget, while Citigroup Inc. and UBS Group AG cut forecasts in response to higher production and weaker demand from China, the biggest consumer. The slump is eroding tax revenues and forcing smaller miners to shut, with Atlas Iron Ltd. saying on Friday it’s halting output.
“I will be speaking with the Chinese finance minister in Washington about expected demand for iron ore over the next 12-months and beyond,” Hockey told reporters in New York. “Obviously we don’t control commodity prices, but I think everyone has a responsibility to ensure that our supply to key markets is consistent, predictable and reliable.”
