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Sustained pressure from a supply glut and a drop in Chinese steel demand have pushed iron ore near its lowest level in more than five years.
Sustained pressure from a supply glut and a drop in Chinese steel demand have pushed iron ore near its lowest level in more than five years, according to Reuters. The price of the steelmaking commodity has fallen 48 percent this year, hitting $68 on November 26, its lowest since June 2009.
As quoted in the publication:
Benchmark 62%-grade iron-ore for immediate delivery to China’s Tianjin port dropped 0.4% to $69.40/t on Tuesday, according to The Steel Index.
The price of the steelmaking commodity had fallen 48% this year, hitting $68 on November 26, its lowest since June 2009.
Citigroup last month said it expected iron-ore to drop below $60 in 2015 owing to renewed supply growth and further weakness in demand.
Production from China’s large steel mills reached 1.71-million tons on November 21, up 4.3% from the previous ten-day period, data from the China Iron and Steel Association (CISA) showed on Tuesday.
Citiroup analyst Ivan Szpakowski said in a note to clients:
However, more pain is expected in January, February, and beyond. Underlying Chinese steel demand is expected to once again weaken and the annual steel restock should be smaller than normal.
