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Overnight on Wednesday, the benchmark price for iron ore for immediate delivery to the port of Tianjin in China crashed through a five-year low after threatening for more than a week, hitting $US85. 70 per tonne.
Steel prices in China have slumped to 10-year lows amid a faltering property sector, one of the biggest drivers of growth, accounting for 15 per cent of gross domestic product last year.
The price of iron ore hit $US89 per tonne in June but then recovered, however, unlike two and a half months ago, the Chinese government is not expected to introduce stimulus measures.
Not only is the amount of iron ore in the market pushing the price down, it is also hurting mid-cap miners who don’t have the same quality iron ore that the big miners do.
Concerns about China’s property market are bubbling with the Chinese government’s plans to transition the economy away from fixed-asset investment to consumption proving tricky.
Iron ore has broken through a five-year low as worries about China’s property sector and a flood of global supply weigh heavily on the metal.
Read more here: SMH