iron ore prices fall by 20% in a month

Sydney - Tuesday - May 25: (RWE Aust Business News) - from
Platts, a leading global energy and metals information service provider.
Prices of seaborne iron ore imported into China have fallen by
more than 20 per cent in a month, from a peak of $US186 per metric ton
(/mt) on April 20, 2010 to $US147.5/mt yesterday, according to Platts
data.
Platts became the first independent publisher to provide daily
price assessments for iron ore reflective of the transactable value in
the spot open market.
The drop in value of this benchmark iron ore - the key
steel-making ingredient shipped into China, the world largest steel maker
- mirrors similar
declines for basic raw material commodities around the globe.
China imports more than 60 per cent of the world's seaborne iron
ore supplies.
"Concerns over sovereign debt in the Eurozone seem to be hitting
all key commodities globally," said Jorge Montepeque, Platts director of
market reporting.
"These primary industrial inputs are being affected by the recent
market bearishness over concerns of possible economic contraction and
thus, resource need reductions, resulting from the broader sovereign
debt."
Prior to Platts' introduction of daily price assessments in this
benchmark iron ore, known as IODEX and reflecting 62 per cent Fe (iron)
content, the commodity's pricing was traditionally established by the
iron ore industry through a once-yearly single auction and long-term
contract process.
Steel prices are also on the retreat, Platts data shows.
Hot rolled coil, the base material for the automotive and
so-called white steel good industries, is also being knocked by the
bearish tone in many world markets, says Francis Browne, Platts global
director of steel and metals market reported.
Prices for steel coil destined to Europe and the Middle East have
lost more than $US80 per metric ton over a similar month-long period as
for iron ore, with base steel material now trading at $US585/mt in the
Black Sea, a price level not seen since March 25, 2010, he said.
"History shows a tight correlation between economic concerns and
the down-trending financial markets to base materials prices," explained
Browne.
"For example, iron ore hit a low of $US57.00 per metric ton in
November 2008 at a time when the 'credit crunch' buffeted financial and
commodity markets."
Platts' price assessments are underpinned by a robust methodology
of guidelines and quality protocols.
Its IODEX assessments are based on all-day market monitoring and
data collection of transactions, bids, offers and other information from
market participants during the Asian business day until the market close
at 18.30 hours Singapore time.
The data is normalized and a neutral origin 62 per cent Fe
content iron ore fines price assessment is published immediately in
Platts' Metals Alert (PMA), a real-time metals price and news wire
service.