The fine line in iron’s decline

Rather than a total meltdown, an improving global economy and rising steel demand should put a floor under the iron ore price.

You know what has been missing from this rally? Any affection for our iron ore miners. Since the beginning of the year , the All Ord’s is up some 6% (10% at the peak), while our big miners hit a peak of about 4% and are currently 12% lower year-to-date. Outside of our behemoths, Fortescue is 15% lower (although it was up 18% at the peak). Now we know the story – the hunt for yield, our banks are doing marvellously and the like. We also know why our resources are being hit and why iron ore in particular is out of fashion – China slowing, steel demand slowing and a huge supply of iron ore coming on board.

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