Finance Finance News Iron ore price crashes

Iron ore price crashes

Iron ore
AAP
Share
Twitter Facebook Reddit Pinterest Email

Iron ore has crashed overnight putting further pressure on the ASX .

The iron ore September futures contract was down $2.25 a tonne to $90.58, continuing its aggressive downward trend.

The fall will put further pressure on the ASX today which fell 31 points in futures trade overnight.

Iron ore reached its high in 2011, and earlier this year Citygroup economists predicted it would fall to $US80 by 2016.

While each of Australia’s major producers would remain profitable even after big slides in the prices.

Fairfax reports Rio is thought to have a break-even price of $US43 and BHP $US45. Fortescue would have the most to lose from an $80 a tonne iron ore price, having a break even point of $US72.

Copper slide continues

Copper prices fell to the lowest level in nearly two months as worries about the impact of a fraud investigation in China’s metals industry continued to gnaw on the market.

Copper for July delivery, the most active contract, fell 2.5 cents, or 0.8 per cent, to $US3.0155 a pound on the Comex division of the New York Mercantile Exchange.

This was the lowest settlement since April 15, when futures closed at $US2.9875 a pound.

Investors have been selling their copper holdings in recent days amid reports that metal stored in China’s third-largest port, Qingdao, was potentially used as collateral for multiple loans from several banks.

Chinese authorities last week closed the port to new imports of aluminum and copper as they investigate irregularities in connection with warehouse practices.

Palladium falls

Palladium plunged after mining companies and union officials in South Africa tentatively agreed on a proposal to end a nearly five-month-long strike that has halted production of both metals.

Palladium prices had touched a 13-year high amid concerns that the prolonged strike would lead to a global shortage of the metal.

Platinum prices have also climbed, though weaker demand and bigger stockpiles limited gains. Both metals are used in car exhaust filters.

South Africa produces about 80 per cent of the world’s platinum and 40 per cent of the world’s palladium. The metals are often found and mined together.

Investors sold both metals after South Africa’s three largest platinum-mining companies said they agreed “in principle” on a wage deal with the Association of Mineworkers and Construction Union, though union members still need to accept the proposal.

Palladium for September delivery, the most-active contract, tumbled $US40.75, or 4.7 per cent, to $US819.40 a troy ounce on the New York Mercantile Exchange.

This was the steepest one-day percentage drop in nearly a year and the lowest settlement in three weeks.

Platinum for July delivery fell $US39.80, or 2.7 per cent, to settle at $US1,441.30 an ounce on the Nymex.

It was the biggest one-day percentage drop since September.

Gold for delivery in August rose $US12.80, or one per cent, to $US1,274 an ounce on Comex.

– with AAP