Conflicting moves in the price of iron ore and the value of the Aussie dollar on Friday night will send further ripples through the local market and the prices of iron ore miners when stockmarket trading resumes here later this morning.
The dollar ended at 93.78 USc on Saturday morning, our time, and peaked at 94.02c in trading – those moves came as the global spot iron ore price lost more ground and fell to a new five year low of $83.80 a tonne (just under $A90 a tonne).
The fall on Friday night means local listed iron ore producers will have another rough start to the week, especially Fortescue Metals Group, which last week fell 6% to $3.92 – its lowest level since June last year.
That fall means Fortescue has now lost 32.7% in value this year because of the 38% fall in the iron ore price.
BHP Billiton lost 2.8% last week to close at $35.65. (It also traded ex-dividend on Tuesday.)
Rio Tinto shares shed 2.1% in value to end at $61.30.
And two smaller iron ore exporters were among the week’s top 10 worst-performing shares on the ASX.
BC Iron headed the list, falling 19.7% to $2.24 (and dragging down the value of the takeover of Iron Ore Holdings to around $1.09 from the $1.59 when the deal was announced a month ago), while Mount Gibson fell 8% to 63.5¢.
In Brazil, shares in Vale, the largest global iron ore exporter, lost 1.8% on Friday.
But so far the plunge in price has had no impact on the aggressive expansion plans of the big four exporters.
Rio Tinto, the top global supplier, plans to boost output to more than 330 million tonnes in 2015 after an 11% rise to 295 million tonnes this year.
Vale will raise production by 8.4% to 348 million tonnes next year.
BHP is looking for an 9% increase from its Pilbara mines in 2014-15, Fortescue is looking to boost exports by around 25% this financial year and production of around million tonnes.
More and more forecasts have the price falling under $US80 a tonne late this year – that could come much faster than those forecasts would have us believe.
In other commodities, oil and gold had another poor week with losses.
On Friday night, our time, US crude-oil futures fell in the wake of the weaker-than-jobs report.
West Texas light sweet crude futures for October delivery dropped $US1.16, or 1.2%, to settle at $US93.29 a barrel on the New York Mercantile Exchange.
That was a loss of 2.8% over the week. Oil prices have been falling for the best part of the last three months.
In London, October Brent crude fell $US1.01, or 1%, to $US100.82 a barrel.
Over the week, Brent crude lost 2.3%, despite the continuing tensions in Ukraine and Iraq.
Comex gold prices closed slightly higher in New York on Friday night, our time, after giving up most of its early gains in the wake of the weak jobs report.
December gold futures ended up 80 USc at $US1,267.30 an ounce, and edged higher to end the week on $US1,269 an ounce in after hours trading.
Comex gold ended the week down around 1.5%.
Comex December silver rose two cents to $US19.16 an ounce.
Comex copper for December delivery was basically unchanged at $US3.15 a pound.
