Prices
August 28, 2014
Iron Ore Spot Pricing Breaks Through $88 Support Level
Written by John Packard
According to The Steel Index (TSI) spot 62% Fe iron ore fines pricing dropped below $88/dmt and are now at the lowest level recorded since October 2009. TSI reported 62% Fe fines this morning as being $87.30 per dry metric ton (dmt).
Iron ore has been sliding since mid-August 2013 when 62% Fe fines where trading at $142.8/dmt. Since that time iron ore has dropped 39 percent.
During the slide iron ore reached $89.0/dmt on June 16, 2014 and then briefly rallied to $96.6/dmt on month later. Over the past month ore is down $8.3/dmt or 8.7 percent. Over the last week alone iron ore prices have dropped by 5 percent.
“The iron ore market has moved into oversupply at a time China’s economy is slowing, putting downward pressure on iron ore spot prices,” said TSI senior analyst Oscar Tarneberg. “The summer period has seen the usual seasonal slowdown in demand exacerbated by fresh concerns about the health of China’s property sector, and a weakening in previously resilient steel export prices.”
Cost of production out of the Australian mines is reported to be $40 to $50/dmt so there is more room for ore to move should market forces continue to force prices lower.
