Iron ore prices surge for the third day in a row

As of last Wednesday, the price of iron ore has risen to $59.90 per dry metric tonne. It was the third day in a row that the price rose, with Northern China’s import price adding 2.4 percent to the cost. This is according to information from The Steel Index.

Iron ore is now the best-performing commodity for 2016, having enjoyed a 39.6 percent rise year to date, and a 62 percent surge from the record lows at the end of 2015.

Nearly half of the world’s steel is produced by China, and the pan-Asian import of hot rolled steel is up 45 percent since February.

In December 2015, imports reached 96 million tonnes, and cargos for that year set a record of 952.7 million tonnes. Considering the successes of Q1, 2016 could prove to be an even better year.

Chinese steelmakers now rely on iron ore imports, since China itself produces low grades of the substance at a high cost; four fifths are now imports. Port Hedland supplied China with 32.6 million tonnes of iron ore in March.

However, stockpiles of imports languishing at Chinese ports signify that end-user demand is down, and new supplies from Australian mines threaten to flood the market further.

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