Iron ore miners drop as demand from Chinese steel mills fall
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The news: ASX-listed iron ore miners were down by afternoon trade amid low demand from Chinese steel mills and construction.
The numbers: The three biggest mining companies on the ASX were all down at 12:19pm AEST. BHP had slipped 1.5% to $36.29 and Fortescue had fallen 1.3% to $14.84.
Rio Tinto had also fallen 1.9% to $104.04 with the market also digesting news that the miner has agreed to settle a fraud case relating to an extension of its Mongolia Oyu Tolgoi copper and gold mine for USD138.75 million ($213.65 million).
The wider materials sector was down 1.5% while the iron ore futures index ticked up 0.3% to USD92.65. Last Wednesday, the price settled at USD95.10 but has been in decline since then.
The context: Earlier in the week, Citi analysts downgraded their base three month price forecast from USD100 to USD90 and their six-to-12 month forecast from USD90 to USD85.
Steel output in China, the world’s largest importer of iron ore, fell in May and is about 7% lower than a year ago. Construction has also slowed as the country is hit with unfavourable seasonal weather.
