Oil isn’t the only commodity suffering a price slump.
Iron ore has also dropped and for the same reason – oversupply in a weak global economy.
Just this week prices are down another three percent to a more than five year low.
You can now buy iron ore for half what it cost at the start of the year.
Increased production from the world’s biggest miners has lifted global supply at a time of slower economic growth in China which is a major buyer of ore to make steel. It imports two-thirds of the
The price is now below $70 a tonne and predicted to fall further.
Ivan Glasenberg, chief executive of commodity trader and miner Glencore said on Wednesday that lower prices, particularly of iron ore and oil, were a function of excess supply rather than weak demand.
“We don’t want to oversupply and cannibalise our own business,” Glasenberg said at the company’s annual investor day.
“If we do generate cash and we don’t find better ways to deploy it, we are owner-managers and we are happy to pay back some money to ourselves.”