Iron Ore Price at 3-Week Low, Australian Miners Ease

Marcus Jacob
22 May, 2015
New York City

Australian market indexes struggled after iron ore prices declined for the eighth session in a row and dropped to a 3-week low. The latest decline in the Australia

[R]5:30 PM Sydney – Australian market indexes struggled after iron ore prices declined for the eighth session in a row and dropped to a 3-week low. The latest decline in the Australia’s largest exported commodity extended losses by 8% and analysts held out for price per ton to touch in the low forties.[/R]

Australian market indexes closed lower in volatile trading after the price of iron ore, a key export commodity, declined for the eighth consecutive day in a row.

Iron ore price, the largest exported item from Australia, declined to a three-week low of US$57.60 a ton heading for China ports.

The prices are well above the recent 10-year low of US$46.70 a ton and have been softening in the last three weeks after weaker-than-expected Chinese economic data and continued ramp up of production by two largest Australian miners.

“Stockpiles of iron ore at Chinese ports have been declined to about 22 day’s use, a level that would historically indicate an iron ore price at a level that would help [Treasurer] Joe Hockey return the budget to surplus much quicker,” noted Andrew Forrest, chairman of Fortescue, in opinion editorial page in The Australian.

Australian dollar closed at 79.28 U.S. cents and in stock trading turnover declined to 602 million shares worth $4.1 billion.

At close, the ASX 200 Index edged up 2.40 to 5,664.70 and the broader All Ordinaries Index rose 4.60 to 5,668.20.

For the week, ASX 200 slipped 1.3%.

In commodities trading, gold slid US$1 to US$1,209 an ounce and Brent crude slid 0.05 cents to close at US$66.49 a barrel.

IPO

Australian Finance Group Limited gained 1.3% to $1.21 after the mortgage broker priced its stock at $1.20.

The stock opened at $1.19 and closed at $1.21.

Australian Stock Movers

Aurizon Holdings Ltd increased 1.9% to $5.29 after the rail freight operator plans to invest $180 million and upgrade fleet for its Central Queensland operations.

BC Iron Limited plunged 6.9% to 40.5 cents after iron ore prices declined for the eight sessions in a row and on weak Chinese economic data.

National Australia Bank Ltd fell 0.4% to $33.23 after the bank received approval from the China Banking Regulatory Commission to open its second branch in Beijing later in the year.

OrotonGroup Limited tumbled 13.3% to $2.22 after the luxury fashion retailer forecasted operating profit for the second-half of about $4.5 million compared to $13.3 million in a year ago period.

The retailer said losses at GAP and Brooks Brothers chains are expected to shrink on the improved margin from a year ago period.

Transurban Group slid 0.5% to $10.25 after the toll road networks operator said its financial subsidiary completed an issue of €500 million 10-year bond and the company plans to use proceeds to repay maturing debts and lower the cost of the debt.

In the fiscal first-half, the company reported a net loss of $354 million.