Major global iron ore miners were placed on “credit watch negative” by Standard and Poor’s (S&P).
S&P said the negative credit watch was due to falling iron ore price forecasts. Previous price forecasts dropped from U.S. $65 per ton for 2015 and 2016, to $45 per ton for 2015 and $50 for 2016.
A contributing factor to the downfall in iron ore is the price of metal falling 60 percent over the past 12 months.
The eight iron ore producers being watched by S&P include:
- BHP Billiton;
- Rio Tinto;
- Australia's Fortescue Metals;
- Anglo American;
- Chile's CAP;
- Eurasian Resources; and
- South Africa's Exxaro Resources.
"The revision of our price assumptions and the sharp fall of iron ore spot prices reflect the severe supply and demand imbalance in the market, which we believe could persist for the next two years," S&P said in a statement.
S&P added that the lower price forecasts were due to the continued increase in iron ore supply by major miners, slow growth in Chinese demand and higher-cost producers remaining in the market longer than expected.
Source: Business Insider