Kumba heads for worst month in four yearsComment on this story
Johannesburg - Kumba Iron Ore, owner of Africa’s biggest mine for the steel-making ingredient, headed for the worst month in more than four years after ore prices dropped 30 percent from the 2013 high reached in mid-February.
The shares fell 4 percent to 486.05 rand, the lowest level in more than five months, by the close in Johannesburg today.
That extended the stock’s drop since the start of February to 14 percent.
Kumba is heading for the biggest drop on a month basis since October 2008, when it slumped 32 percent.
Iron ore for immediately delivery recovered from a three- year low of $86.70 a metric ton on September 5 to $158.90 a ton on February 20, according to a price index compiled by The Steel Index Ltd.
The price has since slipped to $134.40 a ton.
“Iron-ore prices are certainly the lead driver behind Kumba’s shares,” Ryan Wibberley, a trader at Investec Asset Management, said by phone from Cape Town today.
“The recovery in ore prices during late last year has been reversed since February.”
Iron-ore prices may average $139 a ton this year compared with $144 last year, Goldman Sachs Group Inc. said in a report today. - Bloomberg News