Iron ore price at six-week low
The iron ore price has fallen for the third day in a row as it edges back from a recent peak above $US60 a tonne.
The iron ore price has fallen to its lowest point for six weeks, sliding for the third day in a row as it continues to edge back from a recent peak above the $US60 a tonne threshold.
Iron ore fell 0.5 per cent to $US58.30 a tonne in the most recent session, from $US58.60 the previous day, and has risen for only two of the past 11 trading sessions.
The commodity is now at its lowest point since July 27, when it settled at $US58, and has been trading in a relatively narrow range since then, reaching a three-and-a-half month high of $US61.80 in August.
Some of the wind has come out of iron ore’s sails in the past two weeks as some industrial production was interrupted to clear the air for the G20 summit in China, sparking some short-term volatility, although the effect of this is likely to be short-lived.
A more significant event for the commodity could be the G20’s decision to work on reducing a global steel glut, as falling demand for the key steelmaking ingredient could push prices lower.
Many analysts and some miners have called prices in the $US60s unsustainable given the growth in supply from both major and junior producers.
But forecasts of a fall to the low $US50s or $US40s have proved elusive on the back of hopes that Chinese infrastructure spending would boost demand. The latest decline could mark the start of a more significant slide, or could be soon reversed.
The surprising strength in the commodity in recent months will be welcome news for Canberra after the May Budget’s estimate of an average $US55 a tonne price was widely seen as overly optimistic.
In London trade, BHP Billiton shares rose 0.2 per cent, while Rio Tinto added 0.5 per cent.