Iron ore price dives to 10-week low
The price of iron ore has slid over 5pc as analysts remain doubtful on the strength of the recent run-up in prices.
The price of iron ore has tumbled over 5 per cent overnight as strength in the US dollar and rising Chinese stockpiles weigh on sentiment.
At the end of the latest session, iron ore delivered to the Port of Tianjin in China slumped 5.4 per cent to $US52.70 a tonne, down $US3 from its prior close.
The fall brings the key Australian export to its lowest mark in 10 weeks, with levels near $US50 a tonne closer to where analysts and the big miners believe prices should sit given strong supply.
The latest dip would be a cause for concern for the Federal Government, which banked on prices holding around $US55 for the 2016-17 Budget, with a substantial fall below this mark to cause a sharp decline in revenues against forecasts.
Weakness in prices has come as the US dollar returns to a position of strength and oil prices start to lose momentum, with both factors turning from tailwinds to headwinds over the past week.
A strong US dollar makes US dollar-denominated commodities more expensive for holders of other currencies, while weaker oil prices reduce the break-even price for marginal producers and consequently cut the price at which supply moves out of the market.
Meanwhile, stocks at iron ore ports in China rose above 100 million tonnes for the first time since early last year, a signal that demand could wane over coming months.