The price of iron ore has fallen almost 30% in just the last two months.
But, over the past few days a string of gloomy steel production and iron ore price forecasts has trimmed the share prices of all iron ore miners with the potential for worse to come if the price projections are accurate.
The increase in the value of the yuan since 2004 means that the price of oil, iron ore, copper, agricultural products and all other commodities have gone down by 25% for China-based manufacturing relative to U.S. based manufacturing.
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The deal digs Mr Albanese out of a hole the size of Tom Price, the huge iron-ore complex in the Pilbara region of Western Australia in which Chinalco stands to take a stake.
The price of inputs has jumped: iron ore is up by about a fifth so far this year.
China relies on Australia for imports of iron ore, the price negotiations for which are increasingly acrimonious.
But it is a nice object lesson in the basic economic proposition first put forward by David Ricardo as the Iron Law of One Price.
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Ricardo called this the iron law of one price.
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After months of negotiations, China's steelmakers agreed to pay up to double the price for the iron ore they buy from Rio Tinto, the biggest-ever annual rise in the cost of the commodity.
This will cost megabucks -- especially if the government opts for long-lasting iron pipes, which are twice the price of less durable steel ones.
Suppliers of iron ore grouped together to demand hefty price rises of 72% for their products in March this year, even after obtaining a 19% rise last year.
In December, steelmakers suffered the doubling of the benchmark price of coking coal, which fuels the blast furnaces that turn iron into steel.
The metals and coal sectors aren't demand driven, but they are price sensitive to the dearth of incremental supply, particularly coal, iron ore and even copper with all its mine outages.
For Glenstrata it is whether the rise in price and increases in demand for copper, iron and coal and all those other feedstocks of the still fast-growing Chinese economy can go on forever.
The fair trade ethos attempts to iron out the volatility of world commodity markets by guaranteeing farmers in poor countries a minimum price for their crops.
Such a switch remains difficult so long as utilities retain an iron grip on the transmission lines in their geographic areas, and the utilities are wary of starting price wars with each other.
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