Written by Frik Els

The price of 62% Fe content ore - the steelmaking raw material - plunged 5% on Tuesday to a six-month low of $61.50 per dry metric tonne according to data supplied by The Steel Index and is now down by more than 33% over just the last month with a consensus view that iron ore prices have got a lot further to fall.

The knock-on effect on the market value of the world's top iron ore miners have been dramatic [as a result].

• The world number four, Australia's Fortescue Metals Group (PINK: FSUMF), a pure play iron ore producer, has been hardest hit. FMG stock has lost more than 23% of its value over the last month and the Perth-based firm is now worth US$15.6 billion on the ASX following a 7.5% drop in Tuesday trading.
• World number one Companhia Vale do Rio Doce SA (NYSE: VALE) is down 16.1% over the same period knocking $8.5 billion off the Rio de Janeiro-based company's market capitalization.
• Diversified giants Rio Tinto PLC (NYSE: RIO) and BHP Billiton Ltd. (NYSE: BHP) between them have given up $19 billion since the iron ore price peak mid-March.

Despite Chinese figures, released on Monday, showing an economy growing at a faster than expected pace of 6.9% in March...and the country's blast furnaces pumping out steel at a record pace of 72m tonnes in March to feed its red hot housing and construction sector...stockpiles at Chinese ports continue to build and additional mine supply – including from domestic Chinese miners – comes on stream.

 There are no shortage of iron ore bears:

• According to Ben Davis, an analysts at Liberum, a London-based investment bank...

"A crackdown on cheap credit and mortgage lending could put a lid on house price rises, with a knock-on impact on construction. That swing in demand growth is hugely damaging. Iron ore prices have got a lot further to fall. They’re easily going to the $40s.”

• In a note last week, David Pleming, of HSBC, said he expected a “massive fall” in the iron ore price this year.

“Strong supply recovery and growth [will drive] a widening surplus in the iron ore market...An April survey shows a median forecast price for iron ore of $57 a tonne during the final quarter of this year.

• FocusEconomics in its April  survey of analysts and institutions shows a median forecast price of iron ore of $57 a tonne during the final quarter of this year. For Q4 2018, analysts expect prices to moderate further to average $54 over the three month period.
• Dutch bank ABN Amro is the most optimistic calling for a $75 average towards the end of 2017.
• London-based Investec sees an average of $71.50 over the course of this year. Year to date iron ore is averaging $83.60.
• BMO Capital Markets see prices correcting sharply from today's levels to average $45 by the start of 2018.
• Oxford Economics expects iron ore to average $72 this year but correct sharply to $51 in 2018.