Iron ore price set to top $80

On the Dalian Commodities Exchange iron ore futures added to 5.3% gains racked up on Friday with May contracts closing at 622 yuan ($90.50 a tonne) on Monday.

Regulators recently upped trading fees and margin requirements to cool down the credit-fuelled speculation in iron ore, met coal and rebar, but volatility in the market show no signs of ending.

Iron ore price set to top $80The latest leg up came after a new 5-year planning document released by Beijing called for the closure of 100 – 150 million tonnes of steel capacity through the end of the decade to increase profitability of remaining producers and tackle pollution.

Authorities are also pushing for consolidation of steel producers with a target of 60% market share for the top 10 steelmakers which should translate into higher prices for steel, iron ore and met coal.

The import price of 62% Fe content ore at the port of Tianjin jumped 3% to $79.20 per dry metric tonne on Friday. The index is likely to breach $80 a tonne on Monday – the highest since mid-September 2014 according to data supplied by The Steel Index.

Year to date the price of the steelmaking raw material is up 84% following near-decade lows in December last year.