But many analysts predict a fall to below $US40 in the next year or two.
Advertisement
“China’s infallibility and omnipotence” as a guaranteed buyer have been “pierced”, Dan Rohr, an analyst for Morningstar, told the Journal. Prices of zinc and tin fell 3-4%, while aluminium prices fell closer to 2%. “That doesn’t change the outlook for iron ore, which is still poor”.
The early selling was triggered by the fall on Wall Street last night on Germany’s hardline stance towards Greece, the 10 per cent slump in spot iron ore and United States Federal Reserve minutes, which lifted expectations the Fed was pushing for a September rate rise.
“Iron ore has just logged its worst trading day on record”. The price had previously fallen to $US47 at the beginning of April, wiping billions of dollars from the federal budget revenue.
The slide in iron ore values is hardly surprising as BHP and Rio have previously communicated that they intend to ramp up production despite an already significant level of oversupply in the market. However the company warned that it was not protected beyond the end of December and the ability to lock in prices and what they would be was unknown.
A stunning bearish run in the price of iron ore threatens to drag the commodity below $US50 a tonne for the first time since early April.
On Wednesday, Dalian iron ore futures suffered the biggest slump and plunged almost 8 percent to an all-time low of 349 yuan per tonne ($56/tonne).
Iron-ore prices are being punished in part because of slackening demand from steelmakers.
Also struggling is BC Iron, which gave up over 3 per cent on Monday and is down over 90 per cent through the last 12 months.
However, with the price of iron-ore falling since the start of this year, a debate had emerged on whether the industry or government policy-makers could have acted to ensure that Australia could have maintained a foothold in a higher priced world. Shares have tumbled some 30 per cent in the past three weeks, partially unwinding a staggering 117 per cent jump over the previous eight months. For years, producers assumed that China would continue to unconditionally absorb a major chunk of their output.
This week’s copper decline is surprising, some analysts said, because it is more scarce than many other commodities. Vancouver-based Silver Standard Resources has cut the cost of mining silver to $10 for every ounce it produces in its Argentinian mine from $19 an ounce.
Advertisement
Investors who booked the new bonds were delighted after the notes rocketed more than four points on the break, to over 102 on the bid side.
