Why the iron ore price is under pressure in one chart

Fortescue Metals Group Limited (ASX: FMG) plays its part in expanding iron ore production

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If you were wondering why the iron ore price has dropped from above US$100 a tonne to current levels of US$60 per tonne, the chart below tracks the major iron ore producers and their production over the past few years – and their expected production over the next 4 years.

Companies include Australia's ASX-listed companies BHP Billiton Limited (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG), as well as Gina Rinehart's Hancock Prospecting (Roy Hill) and China's state-back company CITIC and its Sino Iron Ore project, which has yet to ramp up to its full production of an estimated 24 million tonnes per year.

You can see that these producers alone will have more than doubled iron ore production from 2009 in 2016.

Source: Company reports
Source: Company reports

That doesn't even factor in smaller Australian producers like Mount Gibson Iron Limited (ASX: MGX), Atlas Iron Limited (ASX: AGO), Mineral Resources Limited (ASX: MIN), Arrium Limited (ASX: ARI), nor a host of other global producers.

Motley Fool contributor Mike King has no position in any stocks mentioned. You can follow Mike on Twitter @TMFKinga The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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