Iron ore prices break past $US100

Iron ore prices have broken US$100 ($147) per tonne before landing on
$US99.16 in the Australian Securities Exchange (ASX) Market Index on
Monday.

This continues off high prices last week, when the market
index saw spot prices for the benchmark 62 per cent iron ore delivered
to China at $US100 per tonne last Tuesday.

Prices peaked last Wednesday at $US108 per tonne, which is the highest price seen for the commodity since October last year.

This
sent key iron ore companies’ share prices rocketing up, including
Fortescue Metals Group which shot up by 6.4 per cent, or 89 cents, to
$14.79 – a staggering 90.59 per cent improvement compared with this time
last year.

BHP shares also went up by 3.09 per cent, or $1.07, to
$35.71 per share while Rio Tinto rose by 4.10 per cent, or $3.83, to
$97.23 per share.

With Australia as the world’s largest exporter
and second largest producer of iron ore, the upward trend is a welcome
boost to the country’s share market.

This follows supply concerns
and uncertainty in the iron ore market as Brazil continues to be hit
hard by the coronavirus pandemic.

Market Index attributed global economic growth as the primary factor in driving supply and demand for iron ore.

“When economies are growing, the need for steel in construction increases, which drives the price up,” Market Index stated.

“Growth
in China (the world’s largest consumer of metals) has affected the
price of iron ore so much recently that the spot price can almost be
considered a proxy for China’s economic health.”

Leave a Reply

Your email address will not be published. Required fields are marked *