Shares in BHP Billiton Limited (ASX: BHP) have fallen 34c or 0.93% today to be trading at just $36.12. Over the last 12 months, the stock has ranged between a low of $30.43, which was recorded exactly one year ago today, and a high of $39.79, recorded in February.
Today's fall puts the shares down more than 9.2% below that high.
Here are three reasons the stock could be trending lower today…
- Reports have suggested the miner has laid off up to 500 workers in its iron ore division over the last month. Although the layoffs will help reduce costs, the move clearly reflects the strong headwinds that are facing the industry. And there may be further job cuts still to come…
- Investors may again be getting wary of the iron ore price. Although it has risen in price over the last week to around US$93 a tonne, many analysts expect it to fall towards US$80 a tonne over the coming 12 months…
- Aussie iron ore giants like BHP, Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) are rapidly increasing their production rates of the commodity, while China's demand growth rate is slowing, which will add further pressure to the struggling iron ore price. This doesn't bode well for the miners as it can greatly affect their margins and therefore earnings.
