Iron ore price tops $100 for first time since May on China sentiment

Iron ore rose above $100 a ton on improving sentiment over Chinese economic growth, and as Rio Tinto Group brought forward its timeline for the first shipment from a massive mine in Guinea.

Futures were up more than 1%, heading into triple figures for the first time since May. The steel-making ingredient has recovered over the past few weeks as Chinese officials pledged to tackle excessive competition and outdated capacity, as well as deliver additional property-led policy measures.

Rio said shipments of around half a million to 1 million tons would be exported from the Simfer mine’s block 3 and 4 in Guinea starting November, instead of next year.

The Simandou project, a joint venture divided into four blocks between Rio, Winning Consortium and others, is estimated to have total capacity of 120 million tons. Analysts at Royal Bank of Canada expect a ramp-up to 12 million tons in 2026, not reaching 48 million tons until 2028, according to a note to investors.

Analysts at Citigroup Inc. were doubtful as to how long the rally would last, with prices currently above market fundamentals, according to a research note. “We see gradual decline in steel output rather than a one-size-fits-all 50 million ton cut,” analysts including Shreyas Madabushi said.

Iron ore rose 1.1% to $100.10 a ton in Singapore as of 11.57 a.m. local time, while yuan-priced futures in Dalian advanced. Shanghai steel contracts were mixed.

Rio reported second-quarter iron ore shipments from Australia’s Pilbara, the world’s biggest supplying region, steadied at 79.9 million tons. This was slightly under analyst estimates of 81.93 million tons.

(By Katharine Gemmell)