Save
Print
The iron ore sector has had some respite today with the price being paid for the commodity rising to more than $US42 a tonne overnight.
It's a positive sign for the industry, which saw a record low of $US38.30 a tonne on December 11.
Despite the increase, the iron ore price has declined by more than 42 per cent this year.
Iron ore analyst Matthew Keane from Argonaut Securities said the price was a Christmas gift for producers.
"$US42.75 is the platts reported, which is up over 3 per cent on the last day," he said.
"That's really good recovery heading above the $US40 per tonne mark."
The increase in the latest session saw iron ore increase for the eighth session in a row.
Mr Keane said it was good news to wake up to.
"It really had started to dive down and I think a few people were thinking we were in a new paradigm where below $US40 per tonne would be the new norm," he said.
"But a bit of restocking from the Chinese mills has seen the price come up quite significantly."
Mr Keane said it was a surprise to see the price rise.
"We do often see some restocking at this time of year particularly heading into the Chinese New Year celebrations, which is in February this year," he said.
"But the sentiment out of China was very poor heading into Christmas. So for me it was a bit of a surprise. I didn't expect it to rally so sharply. I thought it may hover and stabilise under the 40 mark.
"It's certainly punching above its weight at the moment."
Despite price increases the positive climb could be short-lived said Mr Keane.
"I don't think it will be sustainable," he said.
"Are we going to keep increasing up to say $US50 per tonne? I would say probably not.
"In terms of inventories at the ports in China we had lows of roughly 80 million tonnes sitting on the decks in China ports but now that's come back up to 93 [million tonnes], which is quite a significant number."
Article from Internet for Reference only
Copyright © 2013 Ferro-Alloys.Com. All Rights Reserved. Without permission, any unit and individual shall not copy or reprint!
- [Editor:Sophie]
Daily News
Research
Magazine
Company Database
Customized Database
Conferences
Advertisement
Trade
Online inquiry
Contact
Tell Us What You Think