Iron-ore prices sank to a near five-and-a-half year low and mining company shares fell, as cutbacks to steel output ahead of the Asia-Pacific Economic Cooperation forum in China dented demand for the steelmaking commodity.
Beijing hustled to “ensure cleaner air” before the summit, when major world leaders would descend on the city, said Commonwealth Bank of Australia analyst Lachlan Shaw. The move prompted heavy industry, such as steel plants, to pare production. Before the push, residents in China’s capital endured some of the year’s worst air pollution over the past two months.
Iron ore fell 1.4% Wednesday to US$76 a metric ton, according to data provider The Steel Index, and is now down 43% year-to-date. It is the benchmark’s lowest value since June 2009.
The plunge is also battering the value of companies that mine the raw material, including Australia’s Fortescue Metals Group Ltd. and Atlas Iron Ltd. Their stock prices fell 8.5% and 17%, respectively, Thursday. China is the world’s largest iron-ore buyer.
RBC Capital Markets said a glut of the commodity, including the availability of cheap stocks sitting at major Chinese ports, continues to weigh on prices. Australian mining companies such as Fortescue and Rio Tinto PLC have boosted production to record rates as new mines planned when prices were booming become operational.
Still, seasonal inventory restocking ahead of winter in the Northern Hemisphere, which tends to disrupt shipments each year as temperatures plummet, should help support prices heading toward year-end, RBC said in a note.
Source: The Wall Street Journal
- metaljunction »
- Metal News
Metal News & Events
METALJUNCTION PUBLICATIONS
Coal Insights (English) Monthly
![Steel Insights](/assets/images/news/coal-insights.jpg)
Coal Insights is a ready reckoner for anyone associated with coal. This publication is aimed at tracking everything related to coal in India.
India Coal Market Watch(English) Monthly
![Steel Insights](/assets/images/news/ICMW_Jan09.gif)
ICMW is a one-stop source for all news, data and research pertaining to coal demand, consumption, stocks, spot- and long-term prices with respect to the Indian Market.
India Steel Market Watch (English) Monthly
![Steel Insights](/assets/images/news/ISMW.gif)
ISMW is a brand new high-end steel market report, covering all aspects of the steel industry in India.
Steel Insights(English) Monthly
![Steel Insights](/assets/images/news/SteelInsights.jpg)
Steel Insights delves into various facets of the domestic and global steel industry such as market fundamentals, raw material price trends, price forecasts etc.