Shares in the world’s biggest iron ore producers were plummeting Wednesday as seaborne prices dropped again on Wednesday to below $90 a tonne, amid growing doubts about the strength of Chinese demand and record port stockpiles.
The spot price for benchmark 62% fines fell by a further 3% to 84.99 a tonne, according to Metal Bulletin Index, extending the drop over the past four sessions to 8.2%.
Iron ore prices now sit at their lowest level since February 9.
The losses for lower grade ore were even larger with the price for 58% fines slumping by 5.4% to $58.28 a tonne.
Producers felt the impact of the drop. Shares in Vale (NYSE:VALE), the world’s No.1 iron ore producer, were slightly down in pre-market (-0.95% to $9.35). Rio Tinto’s stock (ASX, LON:RIO), the second-largest global supplier, closed down 2.6% in Sydney to A$60 and it was trading 1.62% lower ion London at 3,274p. BHP Billiton (ASX:BHP), in turn, closed down 2.92% in Australia to A$23.92
“The iron ore market slumped further today as recent support for elevated prices gave way to further downwards pressure,” analysts at Metal Bulletin wrote. “Downwards momentum across the grade boundaries has accelerated since the start of the week.”
They added that rebar futures fell close to its daily lower limit during the day, which led to pessimism growing in the spot market.
More to come…
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