There are signs that the commodities rout is bottoming out, but iron ore prices still face downside risk, BHP Billiton's chief executive told CNBC on Wednesday.
Andrew Mackenzie admitted that the "collapse of OPEC" and sustained slide in oil prices caught the mining giant by surprise, although "there are some signs that may have bottomed", which may stem the spillover on other commodities, he said.
In December, the Saudi Arabia-led Organization of Petroleum Exporting Countries declined to cut production, even amid a global oil oversupply, leading to further price falls. Subsequent attempts by OPEC and non-OPEC producers to agree a deal on production levels have so far proved fruitless.
But the mining boss had a less positive outlook on one of BHP's key product.
"The reality is ... the supply of low-cost iron ore continues to grow at a faster rate than demand is increasing," Mackenzie said on the sidelines of the Australian Financial Review Business Summit in Melbourne.
"So, of all the products that we produce, it has the greatest risk of price downside, but we still make the most money in it. So, if we can continue to reduce the cost of producing iron ore in Australia, we can win market share, and we can still make appropriate profits."