Iron ore plunges to 10-month low, threatening ASX record high...

Iron ore plunges to 10-month low, threatening ASX record high
Joshua PeachMarkets reporter
Updated Apr 1, 2024 – 4.16pm,first published at 3.36pm


Another fall in the price of Australia’s dominant export over the long weekend is threatening to hamper an ASX rally which drove the benchmark to a record high last week.

Iron ore dropped 4.3 per cent to $US96.70 a tonne during trading in Singapore on Monday, touching a 10-month low and adding to the steelmaking material’s three-month decline from above $US130 in January.
The China Iron and Steel Association warned last week that China’s property downturn and relatively weak infrastructure were delaying a recovery in steel demand. In March, China’s steel industry purchasing managers’ index sank to 44.2 – its lowest reading since May last year.

The fall on Monday came after iron ore producer and ASX heavyweight BHP rallied 1.4 per cent on Thursday in a shortened trading week, helping the ASX 200 index close at a record high of 7896.9 points.

Katana Asset Management portfolio manager Romano Sala Tenna said the drop in iron ore was unsurprising given prices had largely held up in the back half of last year despite a worsening outlook for the Chinese property market, a key source of steel demand.


“We think the drop has been very reasonable given how abnormal the price had remained before now,” he said. “We wouldn’t be surprised to see it go lower.”

Mr Sala Tenna said that while prices were unlikely to meaningfully hit low-cost Australian iron ore producers, other miners might be starting to feel the pinch.

“We may be starting to get close to the cost curve for some of the higher-cost Chinese producers, so we may start to see some pushback.”

The fall in iron ore follows similarly bad news for nickel miners after the Indonesian government forecast that nickel exports would quadruple by 2030, despite a supply glut that has already prompted several Australian operations to curb production and close mines.