Comparative review

The iron ore boom is over. We prophesised the end in Iron ore: it’s (not) different this time and were a little smug in Iron ore: trumpets and warning bells as those prophecies turned true. With prices falling from peaks of almost $200 a tonne earlier in the year to just over $100 a tonne, many believe the worst is behind us. We disagree. Additional supply and falling demand from an unprofitable and oversupplied steel sector could see prices falling to $70-$80 a tonne. At that level, any local iron ore miner that isn’t BHP Billiton or Rio Tinto will struggle...

The iron ore boom is over. We prophesised the end in Iron ore: it’s (not) different this time and were a little smug in Iron ore: trumpets and warning bells as those prophecies turned true. With prices falling from peaks of almost $200 a tonne earlier in the year to just over $100 a tonne, many believe the worst is behind us. We disagree. Additional supply and falling demand from an unprofitable and oversupplied steel sector could see prices falling to $70-$80 a tonne. At that level, any local iron ore miner that isn’t BHP Billiton or Rio Tinto will struggle to make adequate returns on capital. It’s for that reason that we’re taking an axe to the sector.

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