Iron ore just took a nasty fall and is back below $US70

Photo: Getty Images (File)

The unwinding in iron ore prices continues, with the benchmark spot price fixing 4% down today at $US68.85.

The price is now 8% down on last week. Spot rebar futures fell heavily during today’s trading session, according to Metal Bulletin.

Lower grade ore also fell, with the price for 58% fines also falling 4%.

Sustained price changes in the level of prices for iron ore, Australia’s biggest export, can make a difference of hundreds of millions of dollars to Australia’s federal budget bottom line.

The minutes of this month’s Reserve Bank of Australia board meeting noted today that the bank’s governing body had discussed the volatile iron ore market in some detail — and expected prices to fall.

“[Board] members discussed the influence of China on the global iron ore and steel markets more generally. They noted that China was by far the largest consumer and importer of iron ore globally. This reflected the fact that China, with the world’s largest population, had reached a similar level of steel production per capita to that of industrialised economies,” the RBA minutes said. “Iron ore prices had been supported at higher levels because of sustained strong demand for steel in China. However, prices were expected to fall in the period ahead because of the ongoing expansion of global iron ore supply following an extended period of strong investment.”

There’s more on that here.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.