Economy

Sep 4, 2014

Iron ore prices are down, down — and it’s going to get a lot worse

The Chinese building boom was unprecedented in scope and swiftness. The bad news? The bust will be of the same magnitude.

Today we’ve taken out the post-2009 iron ore price low with a resounding “crack” in the floor of the global steel edifice, and so I’ve prepared a few extra charts to celebrate the occasion and attempt to offer a sense of the magnitude of what is transpiring. First, the price  table for September 2, 2014:

Next, the daily price chart, which again shows no useful contango and no turning signal:

 

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5 comments

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5 thoughts on “Iron ore prices are down, down — and it’s going to get a lot worse

  1. stephen Matthews

    please explain then why the Fortescue Metals share price is up 1% today?

  2. Nick Ryan

    These Iron Ore prices being pushed around are CFR – price delivered China.

    If I were (and I am not) a punter holding FMG, Atlas or BHP, I’d prefer to see reported the FOB price – what suppliers are paid as the stuff is loaded into the buyer’s ship.

    With current freight rates around US$8.50/ton, that means the price in hand is actually $78/79 – an important distinction for higher-price producers..

  3. Graeski

    Since the election of the Liberals and the far-right social contagion they have brought with them I no longer have a stake in the future of this country and neither do my kids, so send the bastards that own the mines broke as soon as possible as far as I’m concerned. It couldn’t happen to a nicer bunch of people.

  4. nonchalance

    Graeski – Gina too?

  5. TomM

    Long term price chart? 5 years is hardly long term for commodities. Look at the price for iron ore for the 10 to 20 years before 2005 and its still currently 2 to 3x where it was, even adjusting for inflation

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