Investors woke up to the iron ore price plunge overnight, sending the prices of BHP Billiton (BHP) and Rio Tinto (RIO) shares sharply lower in London and New York.
And, combined with another small loss for Wall Street, the jitters about iron ore will see the Australian market starting with a loss of 30 points after yesterday’s small gain.
Iron ore prices again plunged sharply yesterday, tumbling below $US70 a tonne for the first time in five months.
The price of 62% ore deliverable in northern China fell 6.3% to $US67.90.
It was the biggest one-day fall since May last year.
The news didn’t impact the ASX prices of BHP (down just 0.3% in reaction to the board’s rejection of the Elliott Advisers proposal to restructure the group), and Rio where the shares eased 1%.
In London BHP shares 3.5% and in New York they tumbled 4.7%. Rio Tinto shares lost nearly 4% in London and more than 5% in New York.
Fortescue shares were down 1.8% yesterday in Australia.
All will fall today when trading resumes later this morning, making for a tough day after Wall Street’s small losses. Oil dipped nearly 1%, but gold rose again to more than $US1,280 an ounce.
Iron ore prices are now off more than 28% since hitting $US94.86 in early February.
The Dalian futures exchange in China was also down, with active contracts off 2.5% on the day, indicating the spot price is likely to continue its pre-Easter fall when trading resumes on Thursday.
Up to the current sell off, the iron ore price had risen steadily from a low of $US56 in mid-October to a high of $US94.86 on February 21.
In that period it has averaged $US79 a tonne, more than double the decade low of $US38 a tonne where it started last year.
