The Northern China import price of 62% Fe content ore plunged 5% on Tuesday to a six-month low of $61.50 per dry metric tonne according to data supplied by The Steel Index. The price of the steelmaking raw material is now down by more than a third over just the last month.
The knock-on effect on the market value of the world’s top iron ore miners have been dramatic with world number four, Australia’s Fortescue Metals Group, a pure play iron ore producer, hardest hit. FMG stock has lost more than 23% of their value over the last month and the Perth-based firm is now worth US$15.6 billion on the ASX following a 7.5% drop in Tuesday trading.
World number one Vale is down 16.1% over the same period knocking $8.5 billion off the Rio de Janeiro-based company’s market capitalization. Diversified giants Rio Tinto and BHP Billiton between them have given up $19 billion between them since the iron ore price peak mid-March.
Chinese figures released on Monday showed an economy growing at a faster than expected pace of 6.9% in March on the back of a jump in fixed investment. The country’s blast furnaces also pumped out steel at a record pace of 72m tonnes in March to feed its red hot housing and construction sector.
But market attention has turned towards the supply side as stockpiles at Chinese ports continue to build and additional mine supply – including from domestic Chinese miners – comes on stream. And there are no shortage of iron ore bears.
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