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Cheap Iron Ore Is Here to Stay

But a differentiated production process at steelmakers Nucor and Ternium--both trading in 4-star territory--should better position them for the new environment.

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2014 was a turbulent year for companies involved in the supply chain for steel. Most notably, iron ore spot prices fell to $70 per metric ton after opening the year at $130 per metric ton.

In our view, cheap iron ore is here to stay, and lower iron ore prices will have profound implications on the steel industry. Iron ore's new normal will mean lower steel prices and a flatter cost curve for steel production.

Andrew Lane does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.