MINING stocks took a hit this week as the reality of a massive oversupply of Chinese steel became apparent.
Benchmark iron ore prices fell to $90 a tonne on Thursday, and by yesterday had fallen to $US88.70, levels not seen since the financial crisis.
They peaked about $US190 a tonne last year, and were at $US134 a tonne as recently as two months ago.
That saw mining stocks take a hit on Thursday, but by yesterday shareholders were snapping them up, buying such names as Rio Tinto after it dipped below $50 for the first time since mid 2009. Over the week, Fortescue Metals lost 44? to $3.54, with group chairman Andrew Forrest spending nearly $39 million in two days to increase his shareholding, helping the share price stabilise.
For the week, the benchmark S&P/ASX 200 Index lost 32.8 points, 0.75 per cent, to 4316.1.
Over the month-long profit-reporting period, BHP Billiton's scrapping of the $30 billion Olympic Dam mine expansion, Qantas' first loss since privatisation and Fairfax's write-down-driven $2.7 billion loss delivered the biggest horror headlines.
But Commonwealth Bank delivered its biggest profit of $7.1 billion, and BHP it's second-biggest with $US15.4 billion.
And before a slump in iron ore prices hit some mining stocks, miners and mining services companies generally performed well, including a record profit for Fortescue Metals.
By yesterday market watchers became increasingly excited about a meeting of central bankers in the US.
Federal Reserve chairman Ben Bernanke was due to speak last night, Melbourne time. This time last year he used the event to foreshadow a second round of quantitative easing.
For the week, BHP Billiton lost $1.30 to $31.79, as the company sold its West Australian Yeelirrie uranium deposit to Canada's Cameco Corporation for $US430 million.
Newcrest Mining lost $2.55 to $24.65. Australia's largest goldminer suspended production at its flagship Lihir mine in Papua New Guinea amid a dispute with land owners. Transfield Services fell 19.5? to $1.835, as the head of the construction and maintenance company stepped down after turning a full-year loss into a healthy net profit of $84.8 million.
Perpetual lost 73? to $26.48 as the fund manager planned to cut more jobs next year as it continues with a big restructure that contributed to a 57 per cent drop in its full-year profit.
Flight Centre rose 41? to $23.90. The company said it expected to boost the number of outlets around the world by up to 8 per cent and add 1000 sales staff.
Toll Holdings rose 8? to $4.63 as it said that resolving problems in its business in Japan and its marine shipping operations in Asia were its priority. WorleyParsons rose 4? to $2.52.