Iron Ore Spot Pricing Breaks Through $88 Support Level

During the slide iron ore reached $89.0/dmt on June 16, 2014 and then briefly rallied to $96.6/dmt on month later. Over the past month ore is down $8.3/dmt or 8.7 percent. Over the last week alone iron ore prices have dropped by 5 percent.

“The iron ore market has moved into oversupply at a time China’s economy is slowing, putting downward pressure on iron ore spot prices,” said TSI senior analyst Oscar Tarneberg.  “The summer period has seen the usual seasonal slowdown in demand exacerbated by fresh concerns about the health of China’s property sector, and a weakening in previously resilient steel export prices.”

Cost of production out of the Australian mines is reported to be $40 to $50/dmt so there is more room for ore to move should market forces continue to force prices lower.