Rhiannon Hoyle of The Wall Street Journal reports that iron ore, used to make steel, is one of the worst-performing mined commodities this year amid the copper scramble. She writes:
The price of iron ore has dropped to its lowest in nearly two years, a drain on profits for some of the world’s biggest miners as they raise bets on commodities like copper that they expect will be essential to the energy transition.
Iron ore, used to make steel, is one of the worst-performing mined commodities this year, hit hard by the crisis in China’s property market as far fewer homes start construction.
The benchmark price for iron ore is down by as much as 36% in 2024 so far. A daily price of $90.25 a metric ton on Tuesday is the lowest one recorded since November 2022, according to S&P Global Commodity Insights, which assesses iron-ore prices. The price edged a tad higher Wednesday. […]
The downturn is a hit to corporate war chests at a time when miners, after years of holding back on big investments, are increasing spending on projects and acquisitions in copper and some other commodities, including lithium. Those commodities are expected to experience a sharp rise in demand as more money pours into renewable energy, electric vehicles and power grids.
The mining industry needs to consistently finance and build new copper projects at a rate that was only achieved for a few years at the end of the China-led commodities boom if the world is to meet a goal of limiting the rise in temperatures to close to 1.5 degrees Celsius, commodities consulting firm Wood Mackenzie has previously said.
Of the commodities that miners dig up, iron ore is one of the most vulnerable to a slowdown in China, which buys seven in every 10 tons of iron ore shipped globally. Its property sector is a top source of steel demand. […]
“Already down 30-40% YTD, is there any upside for ore prices? Not yet,” he said.
Shares in BHP and Rio Tinto are down by roughly 20% year to date. Brazil’s Vale, another top producer, is down roughly 35%.
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