Eritrea Mine
Trucks ferry excavated gold, copper and zinc ore from the main mining pit at the Bisha Mining Share Company (BMSC) in Eritrea, operated by Canadian company Nevsun Resources, February 17, 2016. Reuters/Nevsun

A day after iron ore price almost hit US$80 (A$107.51), the price of the key-steelmaking ingredient dipped on Wednesday by 6.4 percent to US$75.10 (A$100.23). It was not just iron ore price than went down, lead and zinc prices also dipped on the same day.

After the price decline of iron ore, analysts warned coal prices would also go down. The price dip caused BHP Billiton shareprices in London by 3 percent and Rio Tinto by 2.3 percent, The Australian reports.

Although the unexpected rise in iron ore price caught the industry by surprise since expectation was it would hover at US$50 (A$66.82) for the rest of 2016. But bearish analysts warn the current price is still not sustainable and the market should brace for a possible price pullback.

Notwithstanding the price surge on Monday, the business daily points out that price of iron ore swinging up and down even if exchanges in China which have been cracking down on speculation. It was the second time in November that price of the commodity almost reached US$80 before it went down below US$70 and then rose again.

Because the rally in price failed to serve as incentive for Chinese iron ore producers, with domestic production down 7 percent year-on-year, Deutsche bank analysts see an opportunity for Australian exporters.

Meanwhile, Hellenic Shipping News reports that Rio is asking steel mills in China to pay a premium price for its highest grade iron ore product. It is the first time the Australian miner did it since the collapse of the yearly pricing system in 2010.

For its Pilbara iron ore product, or PB fines, Rio is asking for an additional US$1 (A$1.3) per tonne about the index price from Chinese mills on long-term contracts for 2017. It breaks a year-long trend of pricing based on spot prices. reports that lead closed at the London Metal Exchange lower by 6.7 percent at U$2,354 (A$3,146.8) per tonne. It was the biggest one-day decline in lead prices in over five years. On the same day, zinc price went down 6.6 percent to US$2,710 (A$3,622.3). The zinc price drop was the biggest price fall for the commodity in six years.