Iron ore prices leapt to multi-year highs on Tuesday as an explosion of demand from Chinese mills and strong rises on futures market pushed prices higher.
The price of 62% Fe fines delivered to northern China jumped $US6.63 a tonne, or 5.4% to $128.57 per tonne, the highest since 2014 and above the previous highs in early July 2019.
The price of higher-grade 65% Fe fines (most of which come from Brazil) jumped $US6.30 to $US134.80 a tonne. That’s also a rise of more than 5% a tonne and is the highest since 2014.
Helping this rise would have been the two-year lows for the US dollar against a basket of major currencies. A weak greenback boosts the $US price of commodities like iron ore, oil, and gold.
MB Fastmarkets said:
“The 65% Fe fines index set a new six-year peak as a result of a transaction for a cargo of Iron Ore Carajas at around $6.10-per-tonne higher than the last known traded price of $128.70 per tonne on August 12.”
What will be interesting is if the price surge sees a rise in Australian exports from July’s lows when shipments out of Port Hedland fell 17%. That was in a month when Chinese imports of iron ore hit a record of more than 112 million tonnes.
