Iron ore price tumbles to 2-year low

By Dow Jones newswires

That is because they take advantage of low iron-ore prices to produce cheap steel for export, as domestic demand has waned. "Export demand is strong from Southeast Asia," said Larry Hu, a Shanghai-based steel trader, dealing mainly in exports.

Iron ore prices tumbled to their lowest level in more than two years due to weak housing demand in China, the world's largest consumer of the steelmaking ingredient, sparking fears that high-cost mines around the world may be forced to close.

Several high-cost mines in China will probably shut down if prices remain below $US90, he said, though the Chinese steel mills that own iron-ore mines will be able to better cope with falling prices.

BHP Billiton, the world's biggest mining company, said in July it plans to continue to raise iron-ore output despite falling prices. "I think prices could fall further in the short term.

Miners in the western state of Goa — which accounted for about half of India's iron-ore exports — are expected to resume supplying their low-grade ore by the first quarter of next year globally as domestic steel mills don't have the capacity to process the ore.

Read more here: Business Spectator


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