AFR: Buying opportunities await in iron ore?

Buying opportunities await in iron ore

BHP in particular has a strong exposure to copper, with more than a quarter of its revenue coming from the base metal. In fact, SG Hiscock’s Australian equities fund has ditched its position in Rio and switched to BHP because of its exposure to commodities such as copper, potash and nickel.

Caution required

But not every investor is convinced now is the right time to jump back in.

“Obviously iron ore has been under pressure and fallen quite heavily. But the reason I wouldn’t be diving in right now is history shows it could go down a lot further,” Atlas Funds Management chief investment officer Hugh Dive says.

He says much of the big steel manufacturing outside Beijing could be shut down ahead of the 2022 Winter Olympics to reduce air pollution. This is what happened ahead of the 2008 Summer Olympics in Beijing when industrial production was shut down.