THE price of iron ore is now dangerously close to a more than five-year low after the commodity was again sold off overnight.
At the end of the latest offshore session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US66.50 a tonne, down 1.3 per cent from its previous close of $US67.40 a tonne and the lowest mark for 2015 to date.
It also leaves the commodity just 1 per cent above the five-and-a-half year trough of $US65.60, reached on December 23.
The latest weakness represents the third straight day of falls, with the streak following quickly on the back of a six-day losing run that was snapped last week.
Recent softness on iron ore markets has followed the release of production reports from Rio Tinto and BHP Billiton that showed both mining giants shipped record amounts of iron ore in 2014.
It further highlights the issue of rising supply to investors as BHP and Rio — together with market leader Vale — ramp up supply further in 2015. Production lifts will only serve to exacerbate the oversupply problem in the sector as demand growth from China stalls.
Oversupply worries have so far led the commodity over 5 per cent lower this year after a near 50 per cent plunge in 2014
Source: The Australian
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