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Mining Australia reported that iron ore has fallen to a three-month low as the People’s Bank of China cut interest rates and major iron ore miners continue to increase output.
Mining Australia reported that iron ore has fallen to a three-month low as the People’s Bank of China cut interest rates and major iron ore miners continue to increase output.
As quoted in the market news:
On Friday the price slid closer to the watermark, falling to US$50.90 per tonne, the lowest level in three months and down nearly 10 per cent in two weeks.
It came as the People’s Bank of China cut interest rates down to 4.35 per cent and the major miners continue to up production rates, with Gina Rinehart’s Roy Hill forecasting shipping to commence soon, adding to the oversupplied market. Despite this fall, the price is yet to drop to the year’s low point of US$44.59, reached on July 8.
Many in the market are expecting the metal to fall even lower. Last week vice president for Citigroup’s China commodities research group, Ivan Szpakowski, pointed to a new recent low for the metal of US$40 per tonne next year.
According to Szpakowski, the slowdown in Chinese demand coupled with oncoming oversupply thanks to record production rates from Vale and BHP is likely to drive down the price below US$50 per tonne by the end of this year, and to US$40 per tonne or lower by the end of the March quarter next year.