Iron ore (2)
Ships waiting to be loaded with iron ore are seen at the Fortescue loading dock located at Port Hedland, in the Pilbara region of Western Australia, December 3, 2013. Reuters/David Gray

Iron ore spot markets experienced another plunge on Thursday. The latest development took the spot market to new one-month lows.

As noted by Metal Bulletin, the spot price declined by 0.46 percent to US$86.79 (AU$115.4) a tonne. Since Feb. 21, the total plunge has amounted to 8.5 percent. However, it has increased by 10 percent year-to-date, which comes on the heels of a more than 80 percent growth witnessed in 2016.

Lower grade ores saw a steeper decline than benchmark prices. The reduction for 58 percent fines went down by 2.2 percent to settle at US$59.47 (AU$79.07) a tonne. “The iron ore market price level appeared to be stabilising somewhat today,” Metal Bulletin said. “While spot market liquidity was still thin, offer and bid levels on the physical platforms indicated a rangebound picture.”

While there are indications that selling may soon end, Chinese commodity futures were able to steady themselves overnight following days of incurring heavy losses. In terms of the most actively traded iron ore and rebar contracts on the Dalian and Shanghai Futures Exchanges, a growth of 0.61 percent and 0.32 percent respectively was seen.

Meanwhile, analysts Gavekal and HSBC have forecast the iron ore prices can decline by as much as 30 percent – or even more. As a result, the Western Australian Chamber of Minerals and Energy (CME) have emphasised the ramifications of bringing further taxes on iron ore into effect.

This week, CME CEO Reg Howard-Smith spoke about the volatility of the iron-ore and resources sector. “These forecasts by world leading experts highlight the fact it would be foolish to bank on iron-ore prices staying at their current levels,” he said. “Unfortunately, plunges in the price of iron-ore is bad news for Western Australia’s budget but it also highlights the fact that, if implemented, the mining taxes will [have an even greater] effect on investment into Western Australia and, therefore, result in job losses.”

Brendon Grylls, Western Australian Nationals leader, has suggested keeping a $5 a tonne iron ore production levy on mining giants BHP Billiton and Rio Tinto. This move will come as a replacement to the ongoing 25 cents a tonne payment. However, both the companies have dismissed the levy increase, saying it could threaten jobs.