Iron ore sank to the lowest level in at least six years amid speculation that mills in China are cutting back steel output, hurting demand for the raw material while supplies from the biggest miners expand.
Ore with 62 percent content delivered to Qingdao fell 1.9 percent to $43.89 a dry metric ton, the lowest in daily data dating back to May 2009, according to Metal Bulletin Ltd. The commodity is headed for a third annual retreat, and Tuesday’s fall eclipsed the previous low of $44.59 set in July.
For “low-cost producers, it makes sense for them to continue to increase production,” Ivan Szpakowski, a commodities strategist at Citigroup Inc., said in a Bloomberg TV interview on Tuesday, referring to the largest miners. “They’re still profitable.”
Iron ore has been battered this year by rising output from the world’s biggest miners including BHP Billiton Ltd., Rio Tinto Group and Vale SA and faltering demand for steel in China, where mills account for half of global output. Goldman Sachs Group Inc. said last week that the global iron ore market is oversupplied, with steel consumption in China remaining weak. Policy makers in Asia’s largest economy have been attempting to steer the economy towards consumer-led growth and services.
“The market has underestimated the demand destruction from the economic rebalancing in China,” Zhang Yifan, head of foreign exchange and commodities at Guotai Junan Securities Co., said on Tuesday before the price data were released. “The worst is still ahead for the ferrous industry.”
The steel industry in China is reaching a critical point, according to Andy Xie, an independent economist who’s been bearish on iron ore prices for years and sees a drop below $40 before year-end. Mills will have to cut production, said Xie, a former Asia-Pacific chief economist at Morgan Stanley.
I doubt it. If it were due to option expiration, MMs just need to take CLF down slightly under $3 and will make those 3 option calls worthless.
"Lamar McKay, the director of exploration and production for BP, said he expects oil prices will stay low for some time, and Michael Townshend, the company’s director for Middle East operations, said he expects the price of a barrel of oil will rise no higher than about $60 for three more years."
I don't think PVA can survive three more years of oil low price. It is over for PVA.....Game over for PVA longs soon.
This stock is heading for delisting and /or reverse split. Worst case, it might not even survive the low oil price in 2016.
The iron ore industry looks just like the coal industry where many have gone BK ( PCX, JRCC, WLT, ANR) and ACI could be next one.
Vote for Trump next year and he will get rid of all illegal immigrant and take business back to USA. Obama foreign policy is making America looks weak to China and Russia!!!
It won't see $1 again any time soon!!!!!!!!!!!
$7 after a 10 for 1 reverse split.
That's right. China will continue to depress world commodity prices and they will stock them up cheap cheap for future expansion into world #1 economy.
Sounds like ANR and ACI will face the same situation with stocks being so low now. If ANR dips below 0.20 like WLT, it will likely get delisted like WLT did.
BIRMINGHAM, AL--(Marketwired - Jul 8, 2015) - Walter Energy, Inc. (NYSE: WLT) ("Walter Energy" or the "Company") today announced that NYSE Regulation, Inc. has determined to commence proceedings to delist the Company's common stock from the New York Stock Exchange ("NYSE"), and that trading in the Company's common stock has been suspended, effective immediately.
The NYSE's determination is based on "abnormally low" price indications of the Company's common stock evident at the opening of trading on July 8, 2015.
oh shet....under $1 buck....loss will continue to get greater with your 50K @ 1.40!!!!!!!!!! LOL