Top copper miner Chile gets back to pre-pandemic output levels
Mines including those operated by Codelco and BHP Group churned out 492,804 tonnes in October.
Australia still accounts for over 50% of the international trade in iron ore.
Iron ore prices have fallen again below $60 a tonne Wednesday, and are hitting Australia’s economy harder than expected.
At the end of today’s session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $59.20 a tonne, further down Tuesday close of $59.35 a tonne.
Continued softness this week has come despite fresh stimulus from the People’s Bank of China, with traders shrugging off the potential impact of the weekend’s rate cut.
The sustained weakness of iron ore prices, Australia’s main export, is making it tougher for the almost two-year-old conservative government to meet its campaign pledge to balance the budget quickly.
Source: MBIO Index, July 1, 2015.
By early March, Prime Minister Tony Abbott’s government forecast that income from resource exports overall in the year ending June 30 would be down 8%, to US$137 billion (A$179). But came the final day of June and estimated earnings from exports of the steel making ingredient and other raw materials to China, Japan and elsewhere slid more than anticipated —11% to A$174 billion.
Australia still accounts for over 50% of the international trade in iron ore. But the value of the commodity has fallen by about 35% over the latest 12-month period—even as production from new or expanded mines swells shipments leaving Australian ports.
As a result, the federal government cut Tuesday its price forecast for the commodity in 2015 by 10% to $US54.40 a tonne.
The government’s forecast, while sombre, was more bullish than some other recent forecasts.
Analysts predicting the worst
Citi had forecast iron ore to fall to $48 a tonne in the third quarter and $US38 in the fourth quarter.
Capital Economics said iron ore could fall into the $30s in the second half of 2015, ending the year at $45.
Earlier this month, Goldman Sachs Group said the spot iron ore price would again fall below $50 a tonne over the medium term, in line with the current marginal cost of production in Australia and fellow iron ore heavyweight Brazil.
Australia & New Zealand Banking Group predicted the price would fall to $53 over the next three months and stay under $60 a tonne in 2016.
