Low oil price a lifeline for small iron miners
* Freight costs down as much as $16 per tonne of iron
* Brazilian miners benefit the most
* Iron prices must fall further to squeeze out extra supply
By Silvia Antonioli and Stephen Eisenhammer
LONDON/RIO DE JANEIRO, Jan 16 (Reuters) - Efforts by big iron ore producers to put smaller, higher-cost rivals out of business by oversupplying the market are not paying off yet, and it's mainly due to price falls in another commodity - oil.
The ploy by Australian majors Rio Tinto and BHP Billiton has pushed iron ore prices to their lowest in more than five years.
That should have squeezed out smaller producers, helping the majors to increase market share and the price to rebound.
But a recent slump in freight rates, largely due to a collapse in bunker fuel prices, is saving the minnows as much as $16 per tonne, almost a quarter of the current iron price.
This, coupled with the benefits of lower diesel prices at the mines and falls in emerging currencies against the dollar, is helping them resist at least a little longer. Continuación...