Low Oil Price Saving Small Iron Ore Producers

Base Metals Investing

Reuters reported that although big iron ore miners are trying to push small producers out of business, the low oil price is in some ways stopping them from doing so.

Reuters reported that although big iron ore miners are trying to push small producers out of business, the low oil price is in some ways stopping them from doing so.

As quoted in the market news:

The ploy by Australian majors Rio Tinto and BHP Billiton has pushed iron oreprices to their lowest in more than five years.

That should have squeezed out smaller producers, helping the majors to increase market share and the price to rebound.

But a recent slump in freight rates, largely due to a collapse in bunker fuel prices, is saving the minnows as much as $16 per tonne, almost a quarter of the current iron price.

This, coupled with the benefits of lower diesel prices at the mines and falls in emerging currencies against the dollar, is helping them resist at least a little longer.

Click here to read the full Reuters report.

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