Big miners slump as iron ore slides below $US90 a tonne

BHP and Rio shares slipped over 2pc at the open, after the price of iron ore tumbled below $US90 a tonne overnight.

Machinery operates in a pit at Rio Tinto Group's West Angelas iron ore mine in the Pilbara.(Photographer: Ian Waldie/Bloomberg)

The price of iron ore has skidded below $US90 a tonne, striking a near two-week low and pushing the share price of locally-listed miners down sharply.

At the open, BHP (BHP) shares were off 2.3 per cent to $24.07, while Rio Tinto (RIO) shed 2.2 per cent to $60.27 a share.

The key Australian export slid 3.6 per cent to $US87.40 a tonne, down from $US90.70 in the session prior, according to numbers from The Steel Index.

Its soft showing was its worst one-day result this year.

It came as Macquarie noted muted confidence around iron ore from traders in its latest Chinese steel survey.

“The overall outlook for the steel market remains constructive; however, the restocking cycle in iron ore appears to be nearing an end, with iron ore traders the least optimistic group in our survey,” the investment bank said in a note.

However, while Macquarie expects prices to slide later in the year, heavy declines are not expected in the near-term.

“Steel mills look well covered for their forthcoming ramp-up in steel output,” its analysts wrote.

“Steel mills are not yet planning to cut iron ore purchases, however, and iron ore prices should continue to be supported while steel prices remain elevated.”

The slide in iron ore prices caused a heavy sell-off in BHP and Rio Tinto stock in UK trade overnight, with the two dual-listed mining giants slumping 4 per cent.