Iron ore price hits 6-month high

The import price of 62% iron ore fines at China’s Tianjin port was $148.70 at tonne on Wednesday, an almost six month high.

The price is up more than 27% from lows struck in October last year when the steelmaking ingredient experienced a mini crash with spot declining from a record high of $180 to $116.

The last time iron ore traded above $150 was mid-October 2011 and the commodity hit a 2012 low of $134 a tonne on February 20 according to Bloomberg data.

China consumes 60% of the 1 billion tonne seaborne global iron ore trade which is dominated by BHP Billiton, Rio Tinto and Vale.

Despite predictions of a severe slowdown in China and lower iron ore prices by rival miners, world number one iron ore producer Brazil's Vale made very positive comments about the market on Wednesday.

The Financial Times (sub required) reports that Macquarie estimates that China's steel production reached an annualized rate of 715m tonnes in March – the highest in at least nine months – and quotes another bullish analyst:

“Those arguing about whether China will have a soft or hard landing are missing the point. It has landed already,” said Rob Clifford, equity analyst at Deutsche Bank, in a note to clients.

“Under most growth scenarios – other than an ultra-bearish one – for China, the country will need more steel production capacity.”

The performance of iron ore is contrast to that of copper. The red metal hit 3-month lows on Wednesday falling to $1,018 a tonne on the LME and $3.63 a pound for the May contracts on Comex in New York. Copper futures hit a high of $4.53 a pound in early August last year.