Iron ore retreats toward $US42

The price of iron ore has fallen toward $US42 a tonne but remains above recent low.

Trucks are loaded with iron ore at the Fortescue Metals Group Christmas Creek mine south of Port Hedland in the Pilbara region of Western Australia. PHOTO: STAFF/REUTERS

Australia’s biggest export commodity has halted its recent winning run as investors worry about softening Chinese demand at a time when industry heavyweights are ramping up supply.

At the end of the latest session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US42.10 a tonne, down 2.4 per cent from its prior close of $US43.10 a tonne.

Despite the drop overnight, the first in 12 sessions, the metal remains 13 per cent above its recent record low of $US37.00 a tonne recorded on December 11.

Global oversupply and softening Chinese demand for steel saw the iron ore price decline by over 42 per cent last year.

A Reuters poll earlier last month suggested the iron ore price could fall below $US30 in coming months, which could place severe pressure on junior miners and high-cost producers.