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Iron ore edges closer to new low

• DANIEL PALMER
  
• 10 DEC, 7:07 AM

• ECONOMY
  
• COMMODITIES
  
• MARKETS

The price of iron ore has held below $US70 a tonne in overnight trade, leaving its five-year low within reach.
At the end of the latest offshore session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US69.40 a tonne, down 0.4 per cent from its previous close of $US69.70 a tonne and only 2 per cent above the five-year low of $US68 reached a fortnight ago.
This week's dip back under $US70 a tonne has followed revised forecasts from JPMorgan that suggest the commodity will average just $US67 a tonne next year, about $US20 below the investment bank's previous expectation. JPMorgan also tips prices to average $US65 a tonne in 2016 and $US68 in 2017, with a recovery back above $US80 a tonne not seen on the horizon.
“The only way the oversupply can be averted is if the low-cost producers cut back on their growth targets,” JPMorgan said in its latest report, according to Bloomberg.
“This is unlikely: feedback from recent site visits to the Pilbara suggests there is currently no consideration for slowing capacity growth from either Rio Tinto or BHP Billiton.”


Iron ore has given up almost 50 per cent of its value this year as the likes of BHP and Rio lift supply amid stalling demand.
The two miners both lost over 1 per cent during a miserable session for stocks in London overnight.