Iron ore price

Big iron ploughs on as if it’s all good today with BHP down a meager 2%, RIO an even more paltry 1.2% and FMG down only 2.3%.

From David Bassanese: If you think the current rout in iron ore prices is bad enough, I have some potentially troubling news for you: by long-run historical standards, prices still appear relatively high.

From The Australian: As iron ore prices threaten to slip below $US50 a tonne and Andrew “Twiggy” Forrest calls for production restraint, his Fortescue Metals Group and BHP ­Billiton have each applied for state government approval to boost iron ore output.

As iron ore plunges so too does RIO’s outlook whether markets are pricing it or not.

Now that’s a question and not an entirely facetious one.

Here are the iron ore price charts for March 31, 2015         Benchmark Tianjin iron ore fell 3.6% to $51, the lowest since 2008 and in the history of the pricing index.

From the FT: …the Brazilian real, which has depreciated almost 20 per cent against the US dollar since the start of the year, falling to an 11-year low…The real’s weakness is being felt by Brazilian farmers who have increased exports, as returns on dollar-denominated commodities rise in in local currency terms.

Never say that markets are rational.

From UBS:   Note that the UBS reference case is $59 this year, then $58, $68 and $75 for subsequent years.

Here are the iron ore charts for March 30, 2015:         And there you have it.

Big iron ore taking it in the team today with both RIO and BHP down 2% and FMG down 3.5%.

From The Australian: US fund management giant The Capital Group has taken advantage of this month’s slide in the share price of Fortescue Metals Group to add to its stake in Australia’s third-biggest iron ore miner.

Occasionally on this long journey, readers have accused me of an iron ore obsession.

Among the piles of media surrounding Fortescue Metals Group today one stands out.

Here are the iron ore price charts for March 27, 2015:           Qingdao spot was a disaster crashing 4% but Tianjin benchmark wasn’t quite so terrible falling 1.3% to a marginal new low of $54.10 (full charts to come).

From Fairfax: Colin Barnett said there had been an over-reaction to Mr Forrest’s idea, including by Rio Tinto chief executive Sam Walsh, who labelled it a “harebrained scheme” and “absolute nonsense”.

More scuttlebutt on Fortescue this afternoon, via The AFR: Fortescue’s stock is worthless at current spot iron ore prices, analysts at CBA calculate. Zippo, zilch… There is $US7.5 billion ($11.5 billion) in net debt squatting on Fortescue’s balance sheet.

Here are the iron ore charts for March 26, 2015: Benchmark Tianjin iron ore fell 1.3% to $54.80 a tonne, 60 cents from a new low.

Some years ago I described what was coming in the iron ore market as “blood flowing through the gullies of the Pilbara”.

From the AFR comes some sense at last: The managing director of Denham Capital, Bert Koth, also defied optimists who have called the bottom for commodity prices.

It’s an about face today for big iron shares as BHP tumbles 1.5% and RIO ignores positive overnight leads to be down as well.

A nice scoop for Matthew Stevens at the AFR speaking with Andrew Forrest: “I just put the very simple argument that when we flagged our expansions in 2009-10, we were in a rising market and we spent the capital we did into that rising market.