Japanese iron ore contract prices tumble

An excess supply of iron ore due to increased production by the world’s leading mining companies is weighing on prices, likely impacting the price of steel materials made from the ore.

Nippon Steel & Sumitomo Metal, JFE Steel and other major Japanese steelmakers have agreed to pay $99 per ton in the July-September quarter for mainstay Australian iron ore from resource giant Rio Tinto and others. The figure is down 16% from the April-June price and the lowest since 2010, when quarterly pricing began.

Q3 income and margins are going to suck for the miners.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.