Fortescue Metals Group Ltd. (FMG), Australia’s third-biggest iron ore producer, plunged the most in 18 months in Sydney after the commodity entered a bear market and China reported weaker-than-expected trade data.
The Perth-based company fell as much as 11 percent to A$4.86, the most since September 2012. It traded at A$4.93 at 11:42 a.m. local time. Rio Tinto Group, the world’s second-biggest iron ore exporter, and BHP (BHP) Billiton Ltd. also fell.
Iron ore last week slid to the lowest since June to enter a bear market and is expected to move into oversupply this year as global mining companies boost supply and a possible slowdown in China curbs demand. Chinese exports in February slid the most since 2009, according to a data release over the weekend.
“Until we know where the iron ore price will bottom, I suspect we’ll see the volatility continue,” said Paul Young, a Sydney-based analyst with Deutsche Bank AG.
BHP, the world’s biggest mining company, last month joined Rio in forecasting price declines for its most profitable product as rising supply moves the market into surplus. Supply increases by companies including BHP, Rio and Vale SA may push the global seaborne surplus of iron ore to 90 million metric tons this year from a balanced market in 2013, UBS AG estimates.
To contact the reporter on this story: Elisabeth Behrmann in Sydney at firstname.lastname@example.org
To contact the editors responsible for this story: Jason Rogers at email@example.com Keith Gosman, Madelene Pearson