Australia’s junior iron ore producers are under renewed pressure as the price of the steel-making commodity fell to a fresh five year low
Chinese spot iron ore prices fell overnight on reports that China had ordered some steel mills to cut production.
Iron ore is trading at around $US76 per tonne amid forecasts it could fall to $US70 by the end of the year.
Australia’s largest export commodity has fallen more than 40 per cent this year and last reached its current level in September 2009.
Pilbara junior miner Atlas Iron is embarking on a cost cutting drive in the face of weak iron ore prices amid thin margins while BC Iron is struggling to break even.
BC Iron and Atlas Iron realise a lower price than the benchmark spot price and incur losses well before large companies such as BHP Billiton and Rio Tinto which have lower costs.
Atlas Iron shares closed 16.7 per cent lower at 22.5 cents and BC Iron shares dropped 5.1 per cent to 84 cents on Thursday.
Larger scale miner Fortescue Metals Group lost 8.5 per cent to close at $3.03.
But the nation’s biggest mining companies were relatively unscathed, with Rio Tinto down 0.3 per cent to $60.00 and BHP off 0.1 per cent to $33.78.