The Iron Ore price crashed $1.62 a tonne for the September 62% Fe futures overnight. That took the price down to $87.92 a tonne, a new low for the year and the lowest level since 2009.
It won’t come as a surprise to Australia’s big iron ore producers, who it seems are happy to drive the price lower with increased output to squeeze marginal Chinese producers. Equally though, the pressure on Chinese producers is likely to be keenly felt by Australia’s own higher cost iron ore producers.
Indeed, the speculation that this is the plan is partly helping drive the price lower.
Looking further out, Bloomberg reports that Helen Lau, an analyst at UOB Kay Hian Ltd. in Hong Kong, believes that the price might fall to “$80 a metric ton this year”. Technically this break below the low of the year is a big one, so this level ore lower is in sight.
On the ASX today we’ll be watching stocks like Atlas Iron, BC Iron, Arrium and Fortescue, amongst others.
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