Iron Ore Price Approaches 13-Month Low; High-Cost Supply Faces Pressure

On August 4, iron ore prices briefly approached a 13-month low, and the market may face pressure for some high-cost capacity to exit.

Key Facts

On August 4, iron ore prices at one point approached a 13-month low, and the market may face pressure for some high-cost capacity to exit. Citi said in a report that current iron ore prices have entered a range that could pressure some high-cost and non-mainstream supply.

Market Dynamics

Analysts including Ephrem Ravi said that at prices between US$90 and US$95 per tonne, roughly 15 million to 40 million tonnes of annual production is at risk, but prices may need to fall further to around US$85 per tonne to meaningfully rebalance the market. As of 12:17 Singapore time, iron ore prices were broadly flat at US$93.80 per tonne, after falling 2.2% on Monday.