Iron ore price plummets as Chinese stockpiles rise
Iron ore prices lost more than 4% of their value on Tuesday, as China’s port inventories have started piling up.
The drop comes as stockpiles in China, the world’s main buyer, climbed 1.2% to 98.5 million tons last week.
The steel-making material traded 4.3% lower to $63.41 a ton, reversing the large gain seen last Friday and reducing gains this year to 46%, according to Metal Bulletin Ltd.
The drop comes as stockpiles in China, the world’s biggest buyer, climbed 1.2% to 98.5 million tons last week, the highest in more than a year, according to Shanghai Steelhome Information Technology Co.
Analysts called the end of the iron rally last month. Goldman Sachs Group, for one, said the price was likely going back down to $35 during the fourth quarter of the year.
Some producers, such as Rio Tinto (LON:RIO), went even further, saying the surge in iron ore over the past four months was simply “not sustainable.”
BHP Billiton (ASX:BHP) had also warned that the industry should be "prepare for lower-for-longer".
China's securities regulator on Friday urged commodity futures exchanges to curb excessive speculation following the surge in prices that sparked fears markets were heading for a risky boom-and-bust cycle.