Iron ore fell to US%96.80 a tonne overnight – its lowest level since September 2012 – and reviving bad memories of the fall to US$86.70 a tonne at that time.
It's a long way from recent highs of US$130 to US$140 a tonne around the end of last year, and the main reason why Australia's iron ore miners Rio Tinto Limited (ASX: RIO), Fortescue Metals Group Limited (ASX: FMG), Mount Gibson Iron Limited (ASX: MGX) and Atlas Iron Limited (ASX: AGO) have seen their shares fall 11.6%, 21.4%, 23.4% and 36.4% respectively.
The issue is rising supply and falling steel demand. BHP Billiton Limited (ASX: BHP) is upping production to 270 million tonnes per annum, while Rio is ahead of schedule to reach 290 million tonnes in the short-term, and is targeting 360 million tonnes over the longer-term. Brazilian giant Vale plans to lift production to more than 400 million tonnes from its current 300 million per annum.
And that's just some of the new supply. Gina Rinehart's Roy Hill mine could add an additional 55 million tonnes, Rio's Simandou project may add 95 million tonnes each year when operational.
So, without further ado, here's the chart of the iron ore price, versus stockpiled ore at China's ports.
Source: Fairfax Media
