ANZ issues call to short iron ore
- By DANIEL PALMER (Author) from BusinessSpectator.com.au
- 1 HOUR AGO
The price of iron ore is edging ever closer to the psychologically important $US60 a tonne mark as analysts continue to talk down the recent recovery in the commodity's price.
At the end of the latest session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US60.60 a tonne, down 0.2 per cent on its prior close of $US60.70 a tonne.
The commodity has drifted to a one-month low after it recently moved above $US65 a tonne for the first time since February ahead of a slump that has seen six red sessions in the past seven.
Driving the losses has been concerns over slumping steel prices on weak Chinese demand and a lift in supplies after a weather-impacted fall in early June.
The developments have offset reports of dwindling stockpiles at Chinese ports.
ANZ is confident the downward trend is not yet over, labelling iron ore as a prime short option for traders after the recent rally "ran too far".
The bank's analysts expect the commodity will edge back to $US53 a tonne over the next three months.
"Iron ore held at Chinese ports have fallen 20 per cent so far this year to a seven-month low," a note read. "While stocks still appear to be declining, we think the trend will reverse soon, ushering in lower prices."
