"this so called low price can not be sustainable over a longer period"
True.
The question is how does the iron ore demand / supply return to equilibrium?
My feeling is that it will get quite ugly before it gets better. IO companies that have debts to serve can't stop produccing just because they are making a sub-optimal return on capital. They NEED to produce just to keep servicing their debt. This will continue the over-supply, forcing prices even lower.
Equilibrium is likely to be restored only when those that can't survive fall by the wayside, reducing supply.
