Some of the world's biggest iron ore miners were on Tuesday placed on ‘credit watch negative’ by Standard and Poor's, as ore prices plunge due to a supply glut and soft Chinese demand.
The global ratings agency said the credit watch change was due to a lowering of its iron ore price forecasts to $ 45 per tonne for the rest of this year, to $ 50 for next year and $ 55 for 2017. The previous forecasts were $ 65 this year and 2016, and $ 70 for 2017. The price of the ore, a key ingredient in steelmaking, has fallen by 60 per cent over the past 12 months to reach a decade-low of $ 47.08 in early April.
The eight iron ore producers being watched by S&P are Anglo-Australian giants BHP Billiton and Rio Tinto, Brazil's Vale, Australia's Fortescue Metals, Anglo-South African firm Anglo American, Chile's CAP, luxembourg-based Eurasian Resources and South Africa's Exxaro Resources.