Iron ore price below $US60 a tonne as declines accelerate

Forecasts remain for the price of iron ore to potentially fall as low as $US45 per tonne in the second half of this calendar year. Photo: Manfred GottschalkIron ore has recorded its sharpest fall in weeks, as Canberra continues to mull whether or not to hold an inquiry into the activities of BHP Billiton and Rio Tinto.
Nanjing Night Net

The price of iron ore delivered to the Port of Qingdao fell $US2.32, or 3.5 per cent, to $US58.53 per tonne on Monday.

The fall came as China steel prices slid to their lowest in 12 years as the iron ore hungry nation’s peak construction season began to ebb.

Since May 11, when iron ore hit $US62.88 per tonne, the commodity has been gradually giving up gains made after BHP in April said it would slow production growth.

The movement in the price of iron ore has come against the backdrop of a public campaign waged by Fortescue Metals Group chairman Andrew Forrest against rivals BHP and Rio Tinto.

Mr Forrest has been winning support in Canberra for his claims that BHP’s and Rio’s activities in driving down the price of iron ore are against the national interest.

However, his push for an inquiry has little support outside political circles and BHP and Rio on Tuesday expressed their exasperation with the ongoing debate.

“Not all inquiries are bad because it can create transparency, but this is a ridiculous waste of taxpayers’ money,” BHP chief Andrew Mackenzie told ABC on Tuesday.

“It’s red tape, pure and simple.”

In an interview with The Australian Financial Review, Rio’s head of iron ore Andrew Harding said he was stunned by Mr Forrest’s campaign.

“As I keep saying, there is a reality dysfunction. The commercial reality of it all gets overlaid by the claim ‘that is rubbish’ and ‘that is not how it works’, but no one ever goes on to explain how it works in the alternative,” Mr Harding said.

“The reality is Australia has a great reputation internationally for its commitment to free and open trade … but if the only time you get to demonstrate how supportive you are of free trade and open markets is when you are going through the bottom of a cycle, the ramifications could be extraordinary.”

Forecasts remain for the price of iron ore to potentially fall as low as $US45 per tonne in the second half of this calendar year.

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