Iron ore prices rose to a four-month high of $124.90 per metric ton (MT) on Monday. That’s up from $121.60 in early November and well above the three-year low of $86.70 that prices hit in early September.
These gains came on renewed signs of a recovery in China, which is the world’s largest iron ore consumer. On December 10, the country’s customs bureau reported that China imported 65.78 million MT of iron ore in November. That’s the second-highest level since the country brought in a record 68.97 million MT in January 2011.
“The mood is improving,” Tom Price, a commodities analyst at UBS AG in Sydney, told Bloomberg. “After Chinese New Year through to the middle of the year, there’s a lift in the raw materials trade, steel production rates lift and the whole industrial sector comes back to life.”
Meanwhile, the Bureau of Resources & Energy Economics (BREE), the Australian government’s commodities forecasting agency, predicted that iron ore prices will average $106 per MT in 2013. That’s up from its September estimate of $101 per MT, but below today’s price.
However, according to Platts, the agency is out of step with the country’s miners, most of whom feel prices will hover around the $120 mark because any amount below that makes it hard for Chinese producers to remain profitable. The BREE feels prices will weaken in the first half of 2013 from fourth-quarter averages before recovering toward the end of the year.
|Get our expert guide to base metals investing FREE! Download this FREE Special Report, Investing Opportunity: Using LME Prices and Base Metals News.|