Written by Frik Els
The price of 62% Fe content ore – the steelmaking raw material – plunged 5% on Tuesday to a six-month low of $61.50 per dry metric tonne according to data supplied by The Steel Index and is now down by more than 33% over just the last month with a consensus view that iron ore prices have got a lot further to fall.
The knock-on effect on the market value of the world’s top iron ore miners have been dramatic [as a result].
Despite Chinese figures, released on Monday, showing an economy growing at a faster than expected pace of 6.9% in March…and the country’s blast furnaces pumping out steel at a record pace of 72m tonnes in March to feed its red hot housing and construction sector…stockpiles at Chinese ports continue to build and additional mine supply – including from domestic Chinese miners – comes on stream.
There are no shortage of iron ore bears:
“A crackdown on cheap credit and mortgage lending could put a lid on house price rises, with a knock-on impact on construction. That swing in demand growth is hugely damaging. Iron ore prices have got a lot further to fall. They’re easily going to the $40s.”
