Despite the gloomy news around at the moment about the Australian mining industry, there was a sign of good news from China for our largest iron ore miners. The spot price of iron ore posted its biggest one-day gain in history yesterday as well as China’s steel futures rising steeply for a second day, supported by hopes Beijing’s approval of $US157 billion ($150 billion) in infrastructure projects would bring back to life steel demand.
The price of imported iron ore cargoes in China rose over the weekend and the benchmark rate jumped by $US6, or 6.7 per cent, to $US95 a tonne on Monday, based on data from China’s Steel Index.
This is the biggest rise ever recorded by the Steel Index, which started assessing spot iron ore prices in April 2009.
“There’s more interest now from iron ore buyers to secure iron ore orders at prices slightly higher than previous deals.” said an iron ore trader in Shanghai.
Last Friday, China’s economic planning body gave the nod to build new highways, ports and airport runways, that analysts estimate at more than $150 billion, roughly a quarter the size of the massive stimulus package unleashed in response to the global financial crisis in 2008. We’ve yet to see what the implications of this will be for the Australian iron ore industry, however it is an indication that stability may just creep back into the mining industry and iron ore producers will still forge ahead with projects and developments.
Iron ore price on the rise† to US$95 a tonne – September 2012