Australia's "Business Daily" reported that the earthquake in Japan brought an unexpected impact to the global iron ore market. The large-scale demand for steel in post-disaster reconstruction has not ignited the confidence of investors and traders in iron ore prices. Just as the Big Three secretly celebrated the iron ore price hit a record high of $200/ton, the spot market iron ore price fell to $170/ton in just two trading days. Such a sharp drop has caused the market to worry about the possible excess supply of global iron ore. Analysts pointed out that in the context of continuous price increases for many years, the world's three major iron ore suppliers have increased their investment and increased production, and a large amount of funds have flooded into the iron ore mining field, resulting in a surge in global iron ore supply. . According to the article in the Business Daily, unlike other precious metal commodities, steel does not have the function of maintaining and increasing value. Therefore, in the long run, steel and iron ore prices are mainly determined by supply and demand. The article pointed out that in fact, the current three giants' steel business is already at a profiteering stage. Take Rio Tinto and BHP Billiton as examples. The iron ore production costs of the two companies are less than $40 per ton, while the price of exports to China is as high as $145-180/ton. The Business Daily article said that the Big Three are well aware that iron ore price adjustments are inevitable, but they all hope to make more profits before the price collapse. The article said that the biggest question now is when will the iron ore price collapse occur? The shock wave brought by the Japanese earthquake may unveil the real veil of global iron ore supply and demand.
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