iron ore prices fall by 20% in a month

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    Sydney - Tuesday - May 25: (RWE Aust Business News) - from
    Platts, a leading global energy and metals information service provider.
    Prices of seaborne iron ore imported into China have fallen by
    more than 20 per cent in a month, from a peak of $US186 per metric ton
    (/mt) on April 20, 2010 to $US147.5/mt yesterday, according to Platts
    data.
    Platts became the first independent publisher to provide daily
    price assessments for iron ore reflective of the transactable value in
    the spot open market.
    The drop in value of this benchmark iron ore - the key
    steel-making ingredient shipped into China, the world largest steel maker
    - mirrors similar
    declines for basic raw material commodities around the globe.
    China imports more than 60 per cent of the world's seaborne iron
    ore supplies.
    "Concerns over sovereign debt in the Eurozone seem to be hitting
    all key commodities globally," said Jorge Montepeque, Platts director of
    market reporting.
    "These primary industrial inputs are being affected by the recent
    market bearishness over concerns of possible economic contraction and
    thus, resource need reductions, resulting from the broader sovereign
    debt."
    Prior to Platts' introduction of daily price assessments in this
    benchmark iron ore, known as IODEX and reflecting 62 per cent Fe (iron)
    content, the commodity's pricing was traditionally established by the
    iron ore industry through a once-yearly single auction and long-term
    contract process.
    Steel prices are also on the retreat, Platts data shows.
    Hot rolled coil, the base material for the automotive and
    so-called white steel good industries, is also being knocked by the
    bearish tone in many world markets, says Francis Browne, Platts global
    director of steel and metals market reported.
    Prices for steel coil destined to Europe and the Middle East have
    lost more than $US80 per metric ton over a similar month-long period as
    for iron ore, with base steel material now trading at $US585/mt in the
    Black Sea, a price level not seen since March 25, 2010, he said.
    "History shows a tight correlation between economic concerns and
    the down-trending financial markets to base materials prices," explained
    Browne.
    "For example, iron ore hit a low of $US57.00 per metric ton in
    November 2008 at a time when the 'credit crunch' buffeted financial and
    commodity markets."
    Platts' price assessments are underpinned by a robust methodology
    of guidelines and quality protocols.
    Its IODEX assessments are based on all-day market monitoring and
    data collection of transactions, bids, offers and other information from
    market participants during the Asian business day until the market close
    at 18.30 hours Singapore time.
    The data is normalized and a neutral origin 62 per cent Fe
    content iron ore fines price assessment is published immediately in
    Platts' Metals Alert (PMA), a real-time metals price and news wire
    service.
 
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