March 13, 2024 (MLN): Iron ore resumed its decline, closing in on a seven-month low and nearing the $100-a-ton level that might start to push out some high-cost production, as Bloomberg reported.
The steelmaking raw material fell more than 4% in Singapore on Wednesday, extending a rout that’s seen it slump from more than $140 a ton early this year on fears over China’s demand prospects.
Steel consumption hasn’t ramped up as some investors had expected in March.
Without major new stimulus measures from Beijing, a key focus of attention for iron ore is cost support.
While major global miners like BHP Group Ltd. and Rio Tinto Group enjoy very low costs and high margins, some more marginal output, in China or India for example, will feel the pinch if prices fall further.
“Cost support will be an important consideration,” Vivek Dhar, an analyst at Commonwealth Bank of Australia, said in a note. “Iron ore will struggle to stay meaningfully below $100 a ton if China’s steel demand tracks sideways this year.”
