The sell-off of Australia's junior iron ore miners has continued today after the commodity dropped 1.2% overnight to US$70.30 a tonne, according to the Metal Bulletin Ltd.
Mount Gibson Iron Limited (ASX:MGX), Arrium Ltd (ASX: ARI) and Fortescue Metals Group Limited (ASX: FMG) are amongst the biggest losers today, having plunged 7.6%, 7.3% and 5.6% respectively. Following on from their 15% and 8% declines yesterday, Atlas Iron Limited (ASX: AGO) and BC Iron Limited (ASX: BCI) are also doing it tough again with the pair down 13% and 7.7% respectively.
Each of these stocks have rallied hard in recent weeks based on signs that the iron ore price may have finally stabilised following last year's 47% decline. However, the commodity has instead extended on recent falls, sparking fears that 2015 could be another rough year. Indeed, companies such as BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) will continue to ramp up their production levels which could certainly drive the price even lower.
As tempting as it might be to start fishing around the sector looking for a bargain or two, investors ought to play it safe by exposing themselves to other sectors which are not directly impacted by the fluctuating commodity prices. While there may come a time to reconsider the sector's prospects, it currently remains far too risky for your hard earned dollars.
