ASX iron ore stocks open lower as global prices tumble
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The news: Metal mining stocks fell in early trading on the ASX as global iron ore prices continued to plummet.
The numbers: Iron ore stocks saw some of the biggest declines in morning trade on the ASX, with Champion Iron (-3.5%), Fortescue (-1%), Rio Tinto (-0.7%) and BHP (-0.5%) all losing ground by 11:00am AEDT.
In a note, UBS analysts said that iron ore prices recently traded down to USD100 ($152) a tonne on falling Chinese steel output, high inventories and demand concerns, despite strong steel exports.
Singapore iron ore futures were last down 1.3% at USD98.20 a tonne.
The context: Despite the downturn, analysts said that prices were now into the cost curve, and expected China's construction industry to lift seasonally through April and May. However, they remained cognisant to weak Chinese steel output.
Meanwhile, iron ore mining costs are expected to continue rising, as low iron ore capital expenditure, increasing capital expenditure intensity, and rising depletion replacement is causing limited new volume growth and "stubborn" unit costs.
The source: UBS research
