Due to the hope of global economic recovery, iron ore prices have risen by 10%
Iron ore prices jumped by more than 10% in Asian transactions on Monday, due to growing expectations that the global economy recovered from the Covid-19 pandemic will surpass China and boost the commodity market.
Singapore’s iron ore futures price rose to more than US$226 per ton, a record high in US dollars. In Dalian, China’s main commodity trading center, the most active futures contract price also rose by 10%.
After the price rise Nearest high In terms of steelmaking raw materials, together with other raw materials, they have been supported by strong demand from China’s rapid economic recovery, and are expected to benefit from support measures from global governments.
S&P Global Platts said that the physical price of iron ore hit a record of nearly $230 per ton on Monday. This in turn boosted the share prices of major iron ore producers, including Rio de Janeiro, with Rio Tinto’s share price rising to a record high of £67.05 on Monday. Large producers like Rio Tinto can achieve breakeven at only $50 per ton.
“It’s not just China now…. This is the full strength of the global steel industry’s recovery.” Westpac Senior Economist Justin Smirk said. “I think the reality is that the market is still very tight and we still have very, very strong steel prices.”
In China, the price of steel bars widely used in the construction industry has risen from US$660 per ton at the beginning of the year to US$865 per ton.
Clarksons Platou Securities wrote in a report to clients: “These prices are record levels, exceeding the highest levels of the boom period before 2010.”
Despite Beijing’s efforts, China’s steel production jumped 19% in March. Crack down on production The government strives to achieve its environmental goals.
China’s Import increase Thanks to its demand for raw materials and the growth of exports. Data released on Friday showed that imports increased by 43% year-on-year, although partly because of the low base when the pandemic hit global trade last year.
This Strong recovery Part of the Chinese economy, which resumed its pre-pandemic growth rate at the end of last year, lost momentum in the first quarter. Iron ore imports fell in April from March.
As geopolitical tensions intensified, Australia’s iron ore trade exports to China have been under scrutiny. Lead to tariffs Goods such as barley, beef and wine. As a result, Chinese steel mills scrambled to lock in the supply of Australian ore.
BMO Capital Markets analyst Colin Hamilton (Colin Hamilton) said Monday that concerns about Singaporean banks’ iron ore financing in Australia and China that may be difficult to obtain in the next few months triggered a surge in the Singapore and Dalian stock markets. .
“We are not surprised by the proposal to temporarily suspend purchases from the Ministry of Industry and Information Technology or the China Iron and Steel Association… And we expect more Chinese people to speak out about excessive prices in the next few days.”
Michael Lovecchio of the brokerage firm StoneX speculated that the rise in iron prices may be attributable to potential market demand, whether “China-Australia tensions are deteriorating” or “only Chinese retail speculation”.
Chinese raw materials have pushed up producer prices this year, data released on Tuesday Expect a jump More than 6%. From last year’s pandemic to 2021, China’s PPI has been negative.
Warren Patterson, head of commodity strategy at ING, said the outlook for inflation is driving investor demand for commodities.
Iron ore is “a real asset and is therefore regarded as a good inflation hedging tool….. He said: “I think this is why we see a large number of investors put money into commodities. “
He added: “We will definitely reach a level where I think price action is out of touch with actual fundamentals.”