Singapore iron ore futures have surged to a four-month high, driven by China’s ambitious plan to construct a mega dam in Tibet. The steel-making material futures contract jumped 3.3 per cent to $US104.10 per tonne, marking its highest level since March after four consecutive weeks of gains.
The surge follows the launch of construction for the 1.2 trillion yuan ($256 billion) hydropower project on the Yarlung Tsangpo river by Chinese Premier Li Qiang on Saturday. This initiative, comprising five cascade dams, is expected to stimulate demand for construction materials, including metals, cement, and glass.
Iron ore is heading towards its first monthly gain since January, as Beijing persists in its efforts to curb overcapacity in the steel industry. This has fueled expectations of improved mill margins and higher raw-material prices. The new dam project is poised to benefit steelmakers, who have been navigating a protracted property crisis.
The price surge has positively impacted major Australian miners. Fortescue Metals rose by 1.5 per cent, Rio Tinto increased by 1.2 per cent, and BHP experienced a 0.1 per cent gain as of 2pm AEST. Fortescue Metals Group (FMG) is an Australian iron ore company. Rio Tinto Group is a multinational mining company with significant operations in Australia.
