Iron ore prices hit lowest in five years
Prices for iron ore tumbled again Friday for the 10th day in a row, hitting levels not seen since October 2009.
The decline is the longest run of daily losses in two years and oversupply as well as China’s unseen signs of recovery are to blame.
Benchmark Australian ore, with a 62% iron content, dropped 0.1% to $87.62 a tonne, according to Metal Bulletin, bringing the monthly loss to 8.4% and the yearly one to over 35%.
The extent of the recent falls is now starting to have a serious impact on the share prices of the sector heavyweights, with Rio Tinto’s stock sinking again Friday to $53.57 at 11:35 am in New York, totalling a 5% decline for the week. Vale was down 0.61% Friday to $13.03, yielding almost 5.3% this week, and BHP lost 1.45% in Sydney, closing at $36.67.
The steel-making raw material is vital to the profitability of many of the world’s largest miners, such as BHP Billiton, Rio Tinto and Vale.
They are spending billions of dollars ramping up output to meet anticipated future demand, and capture market share, while pushing the global market into surplus.
Publish date : Sunday 31 August 2014 00:00
Story Code: 13111