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Rio Tinto Iron Ore Parker Point loading facility reclaimer is seen as part of the mining activities of British-Australian mining and resources company Rio Tinto Iron Ore, at Dampier in Western Australia.
But the industry continues to whet the appetite of investors, with Brazilian producer Vale predicting higher prices. "We are considering that by the end of this year the price can be around $95," said its CEO Murilo Ferreira.
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Iron ore prices have tumbled almost 40 percent this year to trade around $83.50 a ton. Moody's lends support to Vale's price call, indicating a range of $85-$95 a ton for the rest of the year, before climbing to $95-$105 next year.
Brokers, however, are lining up to shoot out the lights.
Macquarie warned this month that the sands have shifted in iron ore after a major supply storm. It believes even holding $100 a ton will be problematic as the displacement cycle means more time spent below triple digits.
Brokers identify the actions of miners as the swing factor behind the worsening outlook. Macquarie admits it underestimated supply growth. More concerning is the slow anticipated recovery. Macquarie has reduced its price forecasts by 5 to 20 percent from 2014 to 2019, with annual averages ranging between $85 and $95 a ton to 2020.
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Rio Tinto chief executive Sam Walsh expects 120 million ton of capacity to be stripped from the sector this year as higher cost producers enter a race for survival. Australian and Brazilian giants will drive home their low cost advantage through scale, with producers in both countries expected to add a total of 132 million tonnes of supply this year. Vale confirmed to CNBC last week that it will not take part in supply cuts.
Some brokers believe this may even be Vale's moment to shine thanks to a quality advantage and currency tailwinds. "The real has weakened off the U.S. dollar much earlier than the Australian dollar weakened to the US dollar, so there is a competitive advantage," said Gordon.