Since falling below US$100 per ton last Friday, the decline in iron ore futures has continued. On Monday, iron ore futures fell more than 11% in intraday trading, hitting US$90/ton, a record low since May 2020.
In the past week, iron ore futures fell more than 20%. Since falling below $100 per ton last Friday, the decline has continued. On Monday, iron ore futures fell more than 11% in intraday trading, hitting US$90/ton, a record low since May 2020.
Since hitting a record high in May this year, iron ore futures prices have begun to plunge, and they have fallen by about 60% from their highs, making them the commodity with the largest decline recently. While other commodities generally rose, aluminum soared to a 13-year high, natural gas prices soared, and coal futures reached new highs.
In the context of global “carbon neutrality”, countries have stepped up air quality control efforts, reduced steel production, and related industry demand has gradually slowed down.
Navigate Commodities managing director Atilla Widnell predicts that the short-term target price of iron ore is US$94.41 to US$98.28 per ton.
According to previous articles on Wall Street, UBS’s latest research report predicts that as the market turns to oversupply, iron ore prices will continue to decline, and the rate of decline “will be faster than expected.”
UBS predicts that the iron ore price at the end of 2021 will remain less than US$100 per ton, and the average price in 2022 will be lower at US$89/ton, which is 12% lower than the previous forecast. The reason is that demand will be further weakened and global supply will increase.
Some analysts said that iron ore prices fell to double digits for the first time since July last year, which made steel producers gratified. But for the mining companies that made profits during the first half of the price increase, this is not a small blow, and it is even more bad news for major iron ore producing countries such as Australia.
Affected by the decline in mining stocks, the Australian stock market opened lower today. The S&P/ASX 200 index fell 2.03% to 7253.10 points.
Mining stocks fell sharply, with Champion Iron down 14.3%, Lynas down 11.8%, and Orocobre down 8.7%.
From January to July this year, iron ore accounted for more than 40% of Australia’s export revenue. It is estimated that for every US$10 drop in iron ore prices, Australia’s fiscal revenue will lose between 3 billion and 3.5 billion Australian dollars.
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