Iron ore gained for the fourth week in five, as the embattled steelmaking commodity made a push for $50 a tonne, the highest level it’s been since mid-November.
Iron ore has been firmly in the grip of the bears for months, and on December 11 it sunk to a record low of $38.30 a tonne. A flood of cheap new supply from the top producers has put pressure on prices since late 2013.
However the commodity has been on something of a rebound of late, last Tuesday climbing to its highest level in three months amid seasonal restocking by China’s steel mills following the lunar New Year holiday and signs of decreased supply. Iron ore with 62% iron content for delivery to China at the port of Qinqdao on Tuesday rose to $46.78 a ton, putting it firmly back in a bull market, generally defined as a more than 20% move from a low.
The gains continued for the rest of the week, as firmer Chinese steel prices spurred producers to restock.
“There’s been restocking going on in the Chinese steel market,” Daniel Hynes, commodity strategist at ANZ Bank, told Hellenic Shipping News. “We’ve seen a bit of tightening in that market as well which has certainly allowed steel prices to inch higher and that has given steel mills more room to purchase some iron ore.”
According to Business Insider Australia, the price surged 11.2 percent for the week, its largest five-day rally since last July. Metal Bulletin had the spot price for benchmark 62% fines rising by 2.93%, or $1.38, to $48.52 a tonne on Friday – the highest level seen since November 11. BI Australia notes that iron ore is now up 26.7 percent since its December 11 low and has gained 11.5 percent year to date.