Iron ore has hit a record low

Photo by China Photos / Getty Images.

There has been a heavy sell-off in commodities on global markets this week, and it has now caught up with iron ore.

According to Metal Bulletin, the spot price for 62% fines has fallen almost 2% to $43.89 a tonne. The price was down $0.86 in the day’s trade.

Metal Bulletin said:

Last week the price fall picked up pace as the weekly average saw its lowest ever calculation with the index dropping almost 10% week on week- a trend continuing this week.

(Emphasis added.)

Here’s the chart and as you can see, after a brief rally earlier this year the downward trend has resumed and there is no end in sight.

According to some calculations, every time there’s a sustained $1 movement in the price of iron ore, it has a $300 million impact on the federal budget bottom line because of the impact on the profitability of Australia’s giant resources companies.

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