Even as Demand Slows Iron Ore Productions Carry on Leading to Huge Stock Piles
Iron ore prices have slipped in recent years as the market faces a supply glut, but the global iron-ore miners show no sign of slowing down their outputs despite the rapid dip in prices.
It seems that their strategy follows a path of greater production, adding as much iron ore possible at the lowest cost and not slowing down output, hoping for a pickup in prices when supply reduces.
Following the economies of scale, bigger companies have still managed to ear healthy margin of profit for every ton they ship at times when prices are low. BHP Billiton Ltd., the Anglo-Australian multinational mining, metals and petroleum company is expected to add more iron ore into the global market next year because the miners has not shown any signs of slowing down output of iron ore in spite of the supply glut that's becoming worse.
Iron-ore prices are at their decades low and large exporters are still churning out high volumes of the commodity which mostly feeds the demand in China. With China's slowing markets, the raw material is stock piling more than ever. Iron ore is the main raw material for steel, which is required in a large range of industries starting from cars to making homes and commercial complexes.