Wednesday, December 17, 2014 9:02:22 AM
DANIEL PALMER BUSINESS SPECTATOR DECEMBER 17, 2014 7:16AM
IRON ore prices have fallen for an eighth straight trading day, barely holding above the five-year low reached at the end of November amid a broader slump in commodity prices.
At the end of the latest offshore session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US68.10 a tonne, down 0.7 per cent from its previous close of $US68.60 a tonne and within touching distance of the recent five-year low of $US68 a tonne.
The red session was the eighth in succession for the commodity, which has lost about half of its value this year due to surging supply and flagging demand growth.
The latest falls follow a sharp revision in the Abbott government’s forecast for the commodity’s price next year to $US60 a tonne, a move which slashes billions from budget forecasts. The revision in this week’s Mid-Year Economic and Fiscal Outlook (MYEFO) comes just seven months after the May budget revealed a forecast of $US95 a tonne, a figure many labelled conservative.
Despite the weakness on iron ore markets, bargain hunters jumped into the UK stock of leading local miners Rio Tinto and BHP Billiton overnight, with the heavyweights gaining 4.2 per cent and 3.3 per cent, respectively.
BHP’s iron ore chief Jimmy Wilson last week said the miner was anticipating continued weakness on iron ore markets, with forecasts of around $US65 a tonne for 2015 labelled as “appropriate”.
Analysts have been sharply revising their expectations for the next couple of years, with most now sitting in the $US60 to $US70 a tonne range.
The latest investment bank to lower its forecast is Morgan Stanley, which cut its 2015 prediction by 9 per cent overnight to $US79 a tonne, a level at the upper end of broader market expectations.
Morgan Stanley said many of the mines that have gone into operation over the past decade were currently “unviable” due to an unwavering supply surge led by Australia.
Branded Legacy, Inc. Unveils Collaboration with Celebrity Tattoo Artist Kat Tat for New Tattoo Aftercare Product • BLEG • May 22, 2024 8:30 AM
"Defo's Morning Briefing" Set to Debut for "GreenliteTV" • GRNL • May 21, 2024 2:28 PM
North Bay Resources Announces 50/50 JV at Fran Gold Project, British Columbia; Initiates NI 43-101 Resources Estimate and Bulk Sample • NBRI • May 21, 2024 9:07 AM
Greenlite Ventures Inks Deal to Acquire No Limit Technology • GRNL • May 17, 2024 3:00 PM
Music Licensing, Inc. (OTC: SONG) Subsidiary Pro Music Rights Secures Final Judgment of $114,081.30 USD, Demonstrating Strength of Licensing Agreements • SONGD • May 17, 2024 11:00 AM
VPR Brands (VPRB) Reports First Quarter 2024 Financial Results • VPRB • May 17, 2024 8:04 AM