The price of iron ore is struggling to find a floor in the face of ongoing concerns of a long-lasting supply glut.
At the end of the latest session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US48.30 a tonne, down 0.8 per cent from its prior close of $US48.70 a tonne.
The commodity is now trading at its lowest mark since July 10 and within sight of this year’s 10-year trough of $US44.10 a tonne.
The push toward a new low point in the current bear market has seen the commodity gain just once through the last 18 sessions, with concerns around Chinese demand weighing heavy.
Rising supply has also been at the forefront of investors’ minds as the ‘big three’ in the sector show no signs of curbing planned expansions.
However, the latest price fall came despite a sharp drop in shipments from Port Hedland in October, with numbers released Wednesday showing a 7.3 per cent fall in iron ore exports.
The key port is located in the Pilbara and counts BHP Billiton, Fortescue Metals and Atlas Iron among its users.
The news is a positive for a sector that is largely expanding through a tumultuous period, but the dip in supply is tipped by Cliffs Natural Resources boss Lourenco Goncalves to just be a temporary event.
“In [the majors’] imaginary world, 60 million tonnes of capacity will go offline this year, then another 125 million tonnes of capacity will go out of commission next year,” he told Bloomberg.
“That’s not the case. Everyone is driving down costs, everyone is trying to continue to cope. You’re not seeing any meaningful number of tons going offline.”
Source: http://www.theaustralian.com.au/