THE price of iron ore has fallen overnight, pushing the commodity within 3 per cent of the five-year low it reached in December.
At the end of the latest offshore session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US67.80 a tonne, down 0.3 per cent from its previous close of $US68.00 a tonne and equal with its lowest mark for the year so far.
After a late rally to end 2014, iron ore started the year around $US71 a tonne but a six-day losing streak that came to an end last week led it back below $US68 a tonne and near the five-and-a-half-year low of $US65.70 reached on December 23.
The commodity remains around 50 per cent below its position at the same time last year as investors fret about an oversupply that has been driven by surging production as demand growth stalls.
Given leading producers such as BHP Biliiton, Rio Tinto and Vale appear set on plans to expand production, hopes for a price recovery may rest on Chinese demand growth in 2015.
Data on the Chinese economy has been mixed so far this year and Chinese Premier Li Keqiang added to the unease about the economy overnight by suggesting the year ahead would be more challenging than 2014.
“This year the downward pressure on the economy is still relatively great and the difficulties being faced are possible even more, making the government’s work more formidable and arduous,” Premier Li said yesterday.
Meanwhile, several false dawns in the price of the commodity have led investment banks to lower their expectations for a recovery in the next two years, with several downgrades last week alone.
Among the most bearish is Citi, which now tips an average price of $US58 a tonne in 2015, down from its previous expectation of $US65 a tonne.
Also expressing doubt about the recovery are Macquarie Group and UBS, with the former revising forecasts about 20 per cent lower this week to $US61.53 a tonne and the latter tipping an average price of $US66 this year.
Source: The Australian
- 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.