Iron ore prices have tumbled again, losing more than 4% on Wednesday and yet investors in Australia were sanguine and ignored the slide when a week ago they were selling off the shares of the big miners with alacrity.
The Metal Bulletin said its index for 62% Fe ore delivered to northern China fell 4.3% to $93.31 a tonne on Wednesday.
That was after the more than 20% slide in the previous three sessions.
Higher and lower grades were also hit on Wednesday with the price for 58% (Fortescue’s main product) and 65% (the latter the main product from Brazil’s Vale) fines slumping 5% and 5.9% respectively to $US82.00 and $US100.40 a tonne.
All three grades have now fallen more than 24% from the multi-year highs struck in July.
And yet the prices of BHP, Rio and Fortescue shares rose in yesterday’s more upbeat wider market with the ASX 200 up 48 points or 0.75%.
BHP Group led the market higher through the day after opening the session lower on the weaker iron ore prices. That was after BHP announced it would spending $US283 million ($419 million) to extend its oil and gas business in the Caribbean. Its shares rose 1.5% to $37.30.
Fortescue shares jumped 4.1% to $7.34 while Rio shares ended the day up 2.4% at $88.52.
Chinese trade data late in the day showed that iron ore imports in July surged 21% to more than 90 million tonnes, the highest since the start of the year after falling to just over 75 million tonnes in June, which was the lowest since February 2016.
The surge in buying came in a month when iron ore prices peaked at just over $US125 a tonne on July 2 and remained well above $US110 a tonne for the rest of the month.
Chinese steel mills, therefore, loaded up on ore to replenish run down stocks at a time when the price was at or near six-year highs. They must have been desperate to get as much ore as possible.
