The International Iron and Steel Institute (IISI), representing approximately 180 steelmakers, today voiced its opposition of a merger between mining companies BHP Billiton and Rio Tinto . The association claimed that the iron ore industry is already dominated by the duo; merging would practically create a monopoly.
The IISI wasn't the only association making its feelings known. The China Iron and Steel Association (CISA) agreed with the IISI, stating the obvious when saying a monopoly is not a good thing for global steel producers.
BHP last week confessed that, if the merger was successful, it would pull in $3.7 billion in annual synergies within 7 years.
Shares of BHP had met support along its 10-day and 20-day moving averages since they made a bullish cross in late August, marking new all-time highs along the way. Since the averages reversed course earlier this month, though, the stock has met resistance beneath the aforementioned averages. Currently, BHP is trading at $70.09, down 6.2%, at a level not seen since mid-September.
On the other hand, RIO seems to be stuck in a stagnant mode. Since late September, the stock has seen support at the 31 level and resistance at the 38.50 level. Since the mining associations vocalized their opinions today, though, RIO has followed in BHP's footsteps, losing more than 5.5% during intraday trading.