Why iron ore miners should worry

Why iron ore miners should worry. After a decade of marching higher, the iron ore price is falling. Quickly. Prices have fallen from about $140 at the start of the year to just over $80 a tonne now, a decline of over 40%. Major mines have embarked on ambitious expansions just as Chinese demand for steel and iron ore is falling. Iron ore mines in China, the world's largest and most expensive producer, are closing: production is expected to fall about 15% this year and again next year as margins narrow. Yet Chinese producers aren't as responsive to price as others. Fixed-asset investment to China's iron ore sector actually rose this year, despite lower prices. That is bad news for local producers. Western Desert Resources, a small producer in the Northern Territory once valued at more than $500m, went bust yesterday. Without Chinese production shutting down, others will follow. (VIEW LINK)