Iron ore is set to record its third consecutive losing quarter today to mark its longest ever streak of declines behind an excess in supply on top of weak activity in the economy of China, the largest buyer of the metal in the world.
Ore with 62% content meant for Qingdao in China has fallen by 17% this quarter to a price per dry ton of $77.97, its lowest value since September 2009, based on data from the Metal Bulletin Ltd. It lost 13% during the first quarter and another 19% in the period from April to June to be on track to post its longest series of quarterly declines since data collection began in 2009.
Prices for the commodity metal plummeted this year after some of the world’s largest producers such as Rio Tinto Group and BHP Billiton Ltd increased their low cost output, fueling a surplus in global supplies and forcing less competitive producers to close. Reduced demand from China resulting from tighter credit limits and a slump in the property market also pressured prices.
Analyst Ivan Spakowski from Hong Kong’s Citigroup Inc. says that, “We had a very sharp slowdown in steel demand. Demand has been very poor and it’s yet to really pick up. We’re still forecasting moderate improvement over the next couple of months.”
The Chinese economy remained disappointing this quarter with its retail and real estate sectors struggling to grow, says China Beige Book International. The country’s policy makers have chosen to forgo additional broad stimulus in favor of accelerated government spending and targeted easing.
Vale SA, the largest producer in the world, meanwhile, predicts that iron ore prices may recover to $100 by year end if stockpiles in China’s ports are whittled down and mill start restocking. Goldman Sachs Group Inc. claims that the commodity’s surplus will increase from this year’s 52 million tons to 163 million in 2015.
The material has been provided by InstaForex Company – www.instaforex.com
Iron ore is set to record its third consecutive losing quarter today to mark its longest ever streak of declines behind an excess in supply on top of weak activity in the economy of China, the largest buyer of the metal in the world.
Ore with 62% content meant for Qingdao in China has fallen by 17% this quarter to a price per dry ton of $77.97, its lowest value since September 2009, based on data from the Metal Bulletin Ltd. It lost 13% during the first quarter and another 19% in the period from April to June to be on track to post its longest series of quarterly declines since data collection began in 2009.
Prices for the commodity metal plummeted this year after some of the world’s largest producers such as Rio Tinto Group and BHP Billiton Ltd increased their low cost output, fueling a surplus in global supplies and forcing less competitive producers to close. Reduced demand from China resulting from tighter credit limits and a slump in the property market also pressured prices.
Analyst Ivan Spakowski from Hong Kong’s Citigroup Inc. says that, “We had a very sharp slowdown in steel demand. Demand has been very poor and it’s yet to really pick up. We’re still forecasting moderate improvement over the next couple of months.”
The Chinese economy remained disappointing this quarter with its retail and real estate sectors struggling to grow, says China Beige Book International. The country’s policy makers have chosen to forgo additional broad stimulus in favor of accelerated government spending and targeted easing.
Vale SA, the largest producer in the world, meanwhile, predicts that iron ore prices may recover to $100 by year end if stockpiles in China’s ports are whittled down and mill start restocking. Goldman Sachs Group Inc. claims that the commodity’s surplus will increase from this year’s 52 million tons to 163 million in 2015.
The material has been provided by InstaForex Company – www.instaforex.com
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