The decline in iron prices has always been a case of when, not if, and it’s all thanks to one reason (yes you have guessed it right!) – low demand from China. Indications are that a rebound might not happen anytime soon. The reason is that there is just too much the supply than the Chinese market can consume, so say the experts.
But big producers are not panicking yet and there’s a good reason. Mohad Taufik, a business development manager at Singapore-based brokerage, Philip Futures, told CNBC Online: “Prices will continue to fall because of economies of scale enjoyed by miners due to the large production volumes. Due to economies of scale, with lower cost, they can lower prices as well.”