The near 4 per cent bounce in the iron ore price on Monday has quickly been forgotten as the commodity fell for the third straight day overnight.
While the commodity currently remains above its five-year low, set on Thursday last week, it may not be long until it retests that level on current trends.
Benchmark iron ore for immediate delivery to the port of Tianjin in China is currently trading at $US83 a tonne, down 1.4 per cent on its $US84.20 closing mark in the previous session, but above last week’s five-year low of $US81.90.
The three days of falls follow a two-day winning streak that culminated in a 3.9 per cent jump on Monday to a level above $US85 a tonne. The brief recovery had come following a period during which the price rose just once in 18 trading days, with the latest moves leaving it with a mere three positive sessions out of the past 23.
The latest price moves come on the back of comments from Bureau of Resources and Energy Economics (BREE) executive director Wayne Calder, who warned price weakness may persist in the near-term with a retreat to $US70 a tonne possible.
“It could go down that far, but we couldn’t see it being sustained at that sort of price level," he said.
"We still expect a downturn in price. The peaks won’t be as high and the troughs will be a bit lower.”
Overall, BREE expects an average trading range of between $US90 and $US95 a tonne over the next five years.
Source: http://www.businessspectator.com.au