Iron ore has seen it’s second biggest one day percentage drop ever today after it fell 8.3% and potentially entered a bear market with prices down 22% on the year.
As you would expect the price moves have hit the big miners with Rio Tinto saying last month that a 10% fall in last years average of $126 per tonne would knock $1.2bn off earnings. Today the price fell to $104.70.
Forget jawboning over the currency by the central bank, this is the sort of news that is going to hit hard on the Australian economy. Ore prices tend to suffer on Chinese worries anytime so it’s not a total “sell the s**t out of AUD” story, but it’s news, that if sustained, is potentially going to keep the upside in check for a while yet.
As you can see from the chart iron ore is susceptible to these big dips in prices everytime Chinese growth is called into question.
Iron Ore chart 10 03 2014
