Iron Ore

Australia is the largest iron ore producer in the world. Iron ore is Australia’s biggest export earner. In 2014 it contributed around $75 billion in export revenues, providing a major source of income for the country. China is the largest consumer of iron ore, and most of Australia’s iron ore exports go to China. The Middle Kingdom’s relentless industrialisation and stimulus-based infrastructure spending over the past decade or so has resulted in growing demand for Australia’s iron ore. To satisfy this increase in demand, Australia has increased its production significantly. BHP Billiton Ltd [ASX:BHP] and Rio Tinto Ltd [ASX:ASX] are the largest producers, followed by Fortescue Metals Ltd [ASX:FMG]. Fortescue established itself after seeing the rise of China and realising what this would mean for future iron ore demand.

Iron Ore Price History

Despite China’s robust growth, the iron ore price is volatile. It rose to a high of nearly US$180/tonne in 2013, before plunging to around US$40/tonne in late 2015. It then recovered to around $90/tonne, before falling again. As nearly all iron ore production receives the ‘spot price’ (as opposed to a fixed long-term contract price), these fluctuations have a major impact on the profitability of Australian producers. During the iron ore price downturn from 2013–15, a number of iron ore producers nearly went under.

Best Iron Ore Investments?

Iron ore production is a ‘scale’ game. The more you can produce, the better and cheaper it is. That’s why Australia’s three big producers, as well as Brazil’s Vale, dominate the global market. Iron ore, thanks to its huge export earnings, also has a major effect on the Aussie economy. When prices rise, it’s good for the economy, but when prices fall, it has a negative effect.

What happened to the BHP share price? (ASX:BHP)

There were two main catalysts that led to the demise of BHP’s share price. If you follow the general consensus, blue chip stocks are supposed to be more stable than other stocks in the market. Yet over the last five years...

Why BHP’s Share Price Fell 1.77% Yesterday| ASX: BHP

BHP’s fall could be partly due to a statement made by a Chinese official Friday afternoon, confirming plans of cracking down on the excessive costs of the steel-making ingredient.Given the fact that China is the world’s biggest steel producer, it was inevitable that there would be ripple effects from the inquiry, hitting not only BHP but also Rio Tinto, whose share price fell 0.50%. Both Aussie companies produce a lot of iron for the world market and China is one country with high demand for it.

Iron Ore Prices Slump Back Down after Chinese Market Complaints

According to the Australian Financial Review (AFR), a top official on behalf of China’s steel industry said Beijing was getting ready to crackdown on soaring prices.Iron ore market has also been hit by supply disruptions, as weather plagues supply chains. Last month Rio Tinto cut production outlook after issues with its mine, adding further to supply shortages.

Iron Ore Prices Rise to Five-Year Highs

Building on its multi-month highs, iron ore prices have risen 8% this month, and over 50% this calendar year, to reflect a post-market buying frenzy over supply issues.Australia’s top export reached US$110.20 on SPGlobal’s iron ore index (IODEX), the highest in five years dating back April 2014.

Fortescue Metals Group Share Price Dips 5%

Fortescue Metals Group Ltd [ASX:FMG] has slumped 5% to $7.24 in late trading on Friday, 26 April 2019, giving up more gains after hitting a decade high of $8.24 last week. Fortescue has been on a strong bull run over the last few months on the back of a spike in iron ore prices...
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