Iron Ore Is Buckling Again as Supply Jumps, China Demand Sags
- BHP, Rio and Vale all post increases in quarterly production
- Demand from China `remains tepid,' MineLife's Wendt says
An excavator loads a transport truck with rock from the open pit of the Lebedinsky GOK (LGOK) iron ore mining and processing plant, operated by Metalloinvest Holding Co., in Gubkin, Russia, on Tuesday, May 28, 2013. Lebedinsky, Russia's third biggest iron ore mine, is owned 81 percent owned by Russian billionaire Alisher Usmanov, who also owns Mikhailovsky GOK, Russia's second-biggest iron ore mine, and Oskol Electrometallurgical Combine, a steel plant supplied by Lebedinsky.
Photographer: Andrey Rudakov/BloombergIron ore is showing signs of buckling again. Prices slumped to the lowest level in three months as the top producers announced increases in low-cost supply while data and comments from China pointed to further weakness in demand.
“All of this extra production out of ‘the big three’ will keep a lid on prices,” said Gavin Wendt, founding director and senior resource analyst at MineLife Pty Ltd. in Sydney. “China demand remains tepid and its steel industry is hurting under margin pressures.”