appConfigEntityId

bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

hooksArticlePageAdvertisementConfigArticle

liveArticle

appConfig

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

sectionsV2

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

json

Shares in Australia’s big miners gained Friday as the price of iron ore spiked nearly 10 per cent after China announced new measures to staunch a rout on its stock market.
The spot price of the commodity bounced back from its biggest one-day fall the previous day when it slumped 10 per cent to US$44.59 a tonne on the back of the free-falling Chinese market.
It regained virtually all of its losses overnight, analysts said, to climb 9.9 per cent to US$48.99 a tonne after Beijing launched fresh measures to halt the sell-off.
“Iron ore has had its largest single-day fall and gain in the space of 48 hours,” IG Markets noted on Friday.
In early trade, BHP Billiton was 1.20 per cent higher at A$26.19 (HK$151), Rio Tinto gained 1.14 per cent to A$51.47 and Fortescue Metals was up 1.12 per cent to A$1.80.
Australia’s benchmark S&P/ASX200 index was up 0.7 per cent at 5,509.9.
Australia is one of the world’s biggest suppliers of iron ore, which is key to making steel, and China is its largest customer, with a diving price of the country’s largest export impacting government revenues.
The iron ore price had already been declining in recent months on the back of increased supply by miners such as BHP and Rio, as well as softer growth in Chinese demand, with the Chinese volatility adding to the mix.
“This week’s price collapse did invoke concern among some producers that supply may have to be curtailed if [prices] remained at these levels,” ANZ analysts said in a note.
“However, the rally was clearly sentiment-driven as a rebound in Chinese equity markets eased concerns over underlying demand.”
Even with the 10 per cent price spike, most Australian miners would still be producing at a loss, with the exception of low-cost giants like Rio and BHP.
They have nevertheless been forced to cut costs although Rio’s iron ore boss Andrew Harding maintains that the “long-term picture for iron ore remains sound” and the commodity would continue to be “a wealth generation machine for Australia”.
He told the Australian Financial Review on Friday that the iron ore price was currently moving around its long-term average after coming off “unprecedented and unsustainable” highs.
“We are seeing a pattern play out now that is entirely consistent with the history of all internationally traded commodities,” he said.
In an effort to calm its markets, China has suspended trading in more than half of the country’s listed stocks, banned new listings, is probing “vicious short-selling” and enlisted the help of the country’s major stockbrokers through a huge stabilisation fund.
 


Australian miner shares rally as iron ore price spikes 10pc

Even with the 10 per cent price spike, most Australian miners would still be producing at a loss, with the exception of low-cost giants like Rio and BHP. Photo: AFP

Australia cuts forecast for iron ore prices amid slump in Chinese steel output

Iron ore miners in Australia's Pilbara region are ramping up output. Exports are forecasts to rise 4 per cent this year.Photo: Reuters

Business

Commodities