Global iron ore prices steadied on Friday, ending a rough week with a second daily gain in a row after falling to a seven month low earlier in the week.
But the question now is how long this steadying trend will last after Donald Trump escalated his trade war with China and attacked the character of the Fed chair, Jerome Powell.
The price of major miners edged up on Friday on the ASX but will be sold off today in what looks like a region-wide sell down across all markets after the big Wall Street plunge on Friday night.
BHP shares closed at $35.42 on Friday for a weekly loss of 2% – and down more than 12% so far in August.
Rio Tinto shares ended at $85 – up 0.3% for the week but also down more than 12% so far this month.
Fortescue shares rose 1.1% last week and ended at $7.57.
Fortescue reports its 2018-19 results later this morning and while the profit will be large and there could be a higher dividend, it will be history as iron or prices are down sharply since June 30 and Friday’s volatility
While prices rose on Thursday and Friday, traders said market confidence has yet to recover.
And now after Trump’s tirades on Friday and the plunge in US share prices and bond yields, the question is whether the escalating war of words shatters the weak confidence levels.
Metal Bulletin’s Fastmarkets iron ore index for 62% Fe fines, closed up $US3.39 or 4% at $US87.81 a tonne on Friday.
The price of Rio Tinto’s 62% Pilbara Blend Fines ended at US$88.19 a tonne, also up to $US3.39 a tonne. That was a rise of just under 4%.
Friday’s rise left the price of 62% fines down around 2% from the previous Friday’s close of $US88.57 a tonne.
At Friday’s close of $US87.81, the price is still around 16% above the $US75.50 a tonne close on January24, the day before the tailing dam disaster at a mine operated by Brazil’s Vale left nearly 300 people dead or missing.