The Motley Fool’s Scott Phillips has suggested China’s short-term market intervention resulting in lower iron ore prices is hiding the Asian superpower's bid to find a longer-term solution. It comes as the price of iron ore dropped from a high of $230 US dollars per tonne to $180 US dollars per tonne. Mr Phillips told Sky News while $230 US dollars per tonne was unsustainably high he was concerned about the speed of the price drop.
“This of course is a demand side intervention by China’s government basically banning people … to say if you are hoarding anything in the space of … raw materials we want you to get it out.” Mr Phillips said the move was a “big watch out” call for Australia given China’s pattern of slapping trade tariffs on exports. “They want to basically use that excess hoarding supply to drive the prices down in the short term while they look around for alternatives,” he said.
Pritti Patel covering for MerdeOrc MurdochGutterMedia