Iron ore continues to quietly crash with the December 62% Fe swap futures contract dropping another 79 cents to a new 5 year low of $73.96 overnight.
The price fall is a combination of the long term market share battle between the globe’s big miners and their smaller competitors and the recognition that Chinese growth is slowing.
Yesterday news broke that Chinese bad loans hit their highest level since 2005, while over the weekend Chinese vice finance minister Zhu Guangyao admitted the economy is going through a “period of pain“ at the G20.
It’s no wonder that turnover in Australia’s miners was one of the dominant features of trade on the ASX yesterday with Fortescue, Arrium and Atlas Iron the top three stocks by volume of trade.
Even though Atlas Iron rose 7.32% yesterday to be the third best gainer on the ASX iron ore’s fall has been unrelenting in its pressure on the AGO share price.
It seems bargain hunters might be in. But until iron ore bottoms the pressure will remain.