August 21, 2020 at 06:24AM
Spot iron ore prices rose to around $130 a dry metric ton on Tuesday, according to commodity price reporting agency Argus. This is the highest level since 2014. Iron ore prices have soared to multi-year highs this week as Chinese government stimulus spurs infrastructure building, boosting prices of the commodity even amid a global pandemic.
The sustained rally in iron ore prices comes after the price of the steel-making ingredient tanked to a trough of $80 a ton in March. The strong gains come after Beijing pumped hundreds of billions of dollars of fiscal stimulus into its economy to help it bounce back from the coronavirus pandemic. Much of this stimulus would go into infrastructure.
In July, China imported a record 112.65 million metric tons of iron ore, a rise of 24% from a year ago and up 10.8% from June, according to customs data. China imported 11.8% more iron ore in the first seven months of this year as compared with the same period in 2019, Reuters calculations show. China also produced a record amount of crude steel in July.
However, iron ore’s price rally may not be sustained, said ANZ. “We see iron ore prices normalising once the seasonal slowdown in construction activity sets in,” the bank’s strategists said in another report on Aug. 12. Fitch Solutions said it expects prices to remain elevated until 2021 before declining modestly.
Iron ore prices have hit multi-year highs as demand soars on infrastructure investment, CNBC, Aug 21
From: The FxPro News Team https://fxpro.news/daily-forex-outlook/iron-ore-prices-have-hit-multi-year-highs-20200821/
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