Iron Ore Surges Back Over $Us80 A Tonne
November 29th, 2016
After threatening the $US80/t mark several times in recent months, the spot price finally lifted over the barrier yesterday, closing up $US1.22 to $US80.83.
It is again threatening the $110/t level in local currency terms, a mark it has not topped since May 2014.
The Chinese Government’s infrastructure spending push, along with further moves to curtail ageing steel plants, underpinned growing confidence about a return to profitability among China’s steel makers.
That has helped inspire a new trading frenzy in steel futures, in turn pushing up iron ore prices.
The commodity price resurgence comes despite growing acceptance that predictions by iron ore bulls that China’s steel output would top a billion tonnes a year by 2030 were wrong.
The outlier on that front, Rio Tinto, has quietly revised its outlook. Rio boss Jean-Sebastien Jacques last week said the billion tonne level was no longer Rio’s “central case”.
Iron ore surprised traders early November 2016 when it $71 US per tonne.
The question on the minds of many mines workers, will the increase in the commodity price have bearing on the rumours of job cuts before Christmas from some of the larger Iron ore miners?