Haywood-1-1 The continued implosion of iron ore prices gained momentum this week as steel prices continue to sink on weak demand/supply fundamentals. Iron ore supply from the ‘Big 4’ producers has ramped up significantly over the past 3-years in response to an explosive rally in prices that peaked in February 2011, when the Platts IODEX price for the benchmark 62% Fe fines product hit $191.90/tonne (CFR China). Since then, the price of the benchmark iron ore product has been in fairly steady decline, dropping by more than 75% over the past 4-years, to today’s $47.50/tonne number. Over the past week, the Platts IODEX benchmark price fell ~10%, adding to its 33% decline year-to-date. The acceleration in the decline of iron ore prices this week prompted the Chairman of one major Australian producer to suggest that the flooding of the iron ore market with supply “incinerates tens of billions of dollars worth of value” for shareholders of all producers, the Australian Financial Review reported. Time will tell if this resonates with any of the major producers, who have deep pockets and continue to fight for dominance. Gold was virtually flat this week, closing Thursday at $1,202 per ounce (↓0.2%), silver (↓2.2%) finished at $16.75 per ounce, while platinum (↑0.3%) and palladium (↓3.6%) finished at $1,157 and $744 per ounce respectively. In base metals, copper (↓3.2%), nickel (↓5.2%), lead (↑1.8%) and zinc (↑2.0%) all finished at $2.72, $5.89, $0.85 and $0.96 per pound respectively. Premium Low Vol met coal continued to fall in stride with iron ore, down to $93.45 per tonne FOB Aus for the week, while the UxC Broker Average Price (BAP) of uranium finished at $39.25/lb U3O8, down $0.13/lb this week.

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