On Tuesday, iron ore has shown the highest price in the last five years. The fear for supply due to increased consumption in the PRC caused the growth.
The cost of ore contracts on the exchange in Dalian has increased by 1.1% – to 131.6 US dollars per ton. Quotes were rising more than 3% in time of trading. At the same time, the price was going up to the levels that the market has not seen since 2013.
In Singapore, prices were jumping not so high, growing “only” to $ 116.4 per ton. Previously, they had increased 2.5%.
On the eve, there were data on the production of steel in China. It turned out that the country had produced in June more than 87.5 million tons of steel. The indicator has decreased slightly if compared with May. This is due to fewer working days in the month. Despite this, daily production has reached a record level of 2.9 million tons. It should be noted that currently China is the number one country in steel melting in the world.
The cost of iron ore has been increasing since the beginning of the year. The accident at the Vale mine in Brazil caused the growth. A strong reduction in production and the emergence of the threat of a global material shortage became the logical consequence of the accident.
Experts agree that prices are not tied to fundamental factors and will immediately recover when the process of supply is established.
The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group