(Minews) - Iron ore retreated to the lowest level since 2012, heading for a fourth weekly loss and nearing $100 a ton, as increased seaborne supplies of the steel-making raw material boosted a global glut.
Ore with 62 percent content delivered to the Chinese port of Tianjin fell 1.3 percent to $103.70 a dry ton yesterday, the lowest level since September 2012, according to data from The Steel Index Ltd. The commodity has lost 23 percent this year, extending a 7.4 percent decline in 2013.
Iron ore entered a bear market in March as the world’s biggest mining companies including BHP Billiton Ltd. (BHP) expanded output from low-cost mines in Australia, betting that rising exports to China would more than offset lower prices. The commodity may decline below $100 going into next year as the surplus builds, Goldman Sachs Group Inc. said this week.
“We expect prices to go below $100 before the end of the year,” Ivan Szpakowski, a Hong Kong-based analyst at Citigroup Inc., said by phone today, forecasting averages of $102 for the third quarter and $100 in the final three months. “The biggest factor is probably still supply-side.”
Shares of BHP, the world’s third-largest iron ore exporter, fell as much as 1.3 percent to A$37.16 and traded at A$37.36 at 2:57 p.m. in Sydney, while Rio Tinto Group (RIO) declined 0.9 percent to A$60.94 and Fortescue Metals Group Ltd. rose 0.4 percent to A$4.84. In Brazil, Vale SA, the biggest exporter, lost 1.5 percent yesterday, taking this year’s retreat to 18 percent.
