Iron ore prices reached almost $200 per ton back in 2011, driven by robust demand from China.
Advertisement
Ore with 62 per cent content delivered to Qingdao fell 0.6 per cent to $US49.65 a dry ton on Thursday, the lowest price since July 9, according to Metal Bulletin Ltd. Prices on Wednesday tumbled 3 per cent, snapping the trading range of $US50 to $US60 that’s held since July 10.
“Any downward room, however, will be small as mines turn reluctant to lower price further”, SMM explains.
Currently, much more China’s domestoc steel enterprices are entering the seasonal reduction of steel production in late October, it is thought that imported iron ore prices in China will likely indicate a decling trend in the coming period.
Reining in excessive output is essential for addressing the oversupply issue, as it is unrealistic to hope that demand will increase under the current economic climate, Zhu Jimin, executive vice president of the CISA, was quoted as saying in a report posted on the CISA website on Wednesday.
“While Sinosteel’s potential default is reflective of the growing inefficiency of state-owned enterprises, it also points to slowing local demand as China continues its transformation into a consumption-based economy”, Gallo said. But data for the first nine months of 2015 shows that the steel industry in China is finally contracting.
Before the drop on Tuesday, Dalian iron ore futures had a slight increase Monday, as reported by Hellenic Shipping News Worldwide. The metal’s price has not yet dropped to the lowest it has been at $44.59, which was reached July 8 this year. The biggest beneficiaries of this trend of course the Australian mining giants, BHP Billiton and Rio Tinto.
Advertisement
The world’s biggest producer by market value said it now expects net income for the year through March at ¥180 billion ($1.49 billion), from a previous forecast of ¥260 billion, citing “extremely tough conditions” on overseas markets. Betting on majors in a commodity downcycle might not sound like the best investment idea.
