Led by shares in Fortescue Metals Group (FMG), another rout is underway in the prices of leading iron ore miners after prices for the mineral again fell sharply last week.
Several leading miners saw the prices of their shares hit new recent lows yesterday.
And watch the rout continue today after another big fall in iron ore prices overnight – they tumbled more than 5% to $US52.28 a a tonne overnight, according to the Metal Bulletin after the 11% slide last week.
Iron ore prices had staged a brief recovery since hitting a 10-year low of almost $US47 a tonne in early April. They had bounced back to just over $US64 a tonne before starting to retreat.
And unlike what happened in the sell off in April and May, the most recent slide has happened without any fuss, thanks to the problems in Greece and the Chinese stockmarket rout which have taken all the publicity.
The shares of the most vulnerable of the big miners – Fortescue shares sank to a new six year low on the ASX yesterday when they lost 5.7% in value to close at $1.71.
Worryingly for FMG investors, they closed on the low, a suggestion they could weaken again today.
It was a level not seen since November 2008, as the GFC was intensifying.
Shares in our biggest iron ore miner, Rio Tinto (RIO) fell to a two-year low yesterday, after iron ore prices retreated to $US54 ($71.87) a tonne over the weekend.
That was the lowest Rio shares have been since June 2013. Its shares fell 2.6% to $US51.16.
BHP Billiton (BHP) shares fell 2.2% to $26.0, the lowest they have been since January this year.
And shares in Arrium (ARI) closed at 13.5 cents yesterday, after hitting a day’s low of 12.5 cents, which was equal to the all time low touched last week.
FMG 1Y – Iron ore weakness pressures Fortescue
Copper prices sold off as well (another big negative for BHP and Rio Tinto) – Comex prices in New York plunged more than 4%, or over 10 cents a pound to $US2.5235 a pound, less than 3 cents above the five year low of $US2.4950 reached on January 30.
