Iron ore slumps to lowest in at least seven years

Analysts said iron ore prices were continuing to move towards a June decade low of $44.59 a tonne.

Ore with 62% content delivered to Qingdao fell 1.9% to $43.89 a dry metric ton, the lowest in daily data dating back to May 2009, according to Metal Bulletin.

Blast furnace operating rates have slipped modestly since October, though less than some market observers expected, CISA said. It ended at $44.91 last week, the lowest since July.

“The four of them, their production costs are all in the teens”, he said by phone on Friday. “A lot of the marginal producers, the new guys, have to exit”. They’re going to go under, you know.

BCI managing director Morgan Ball told shareholders at the company’s annual meeting this morning the company remained committed to its iron ore operations at Nullagine, which are struggling amidst falling commodity prices, and to its development project at Buckland.

Fortescue went from scratch seven years ago to the world’s fourth-biggest iron ore miner with support from Chinese steel mills eager to spread raw material sources beyond Australia’s established producers Rio Tinto and BHP Billiton.

Iron ore may test the $40 level before year-end, Standard Chartered forecasts.

Mills in China are battling sinking prices, oversupply and mounting losses as local consumption shrinks for the first time in a generation amid a slowdown in economic growth.

Japan’s Nikkei index was flat in early trade, down 0.05% at 19,870 points after being closed on Monday for a public holiday.

“The reality is given what the markets are doing, diversification is probably not a bad idea for a company of our size”, Mr Ball said. The company’s shares fell as much as 17% on Monday following the announcement. The trio are the country’s largest shippers.