The price of iron ore has posted a 10 per cent increase since it hit a new record low yesterday, but is still languishing below $US50 a tonne.
Benchmark iron ore for immediate delivery to the port of Tianjin in China was last trading at $US48.30 a tonne, a rise of 9.5 per cent from it’s the record low it posted on Thursday of $US44.10.
The spikes comes as the battered Chinese stock market rose by close to 6 per cent on Thursday.
“The scale of iron ore’s decline was driven more by the stock frenzy than fundamentals,” Xu Huimin, an analyst at Huatai Great Wall Futures Co told Bloomberg.
“[However], that doesn’t change the outlook for iron ore, which is still poor. It has room to fall further.”
The dramatic fall means most Australian iron ore miners are now unprofitable.
BC Iron is forecast to have a break-even price of $US52 per tonne, while Arrium’s break-even price is estimated at $US51 per tonne.
Atlas Iron has a break-even price of US$50 per dry metric tonne.
The new low is also set to test Fortescue Metals Group’s price point of $US44 per tonne.