Tuesday, 9 October 2012

Making up for lost time, Chinese traders send iron ore soaring 6%

Frik Els | October 8, 2012
Mining.com
Benchmark 62% spot iron ore entered China's Golden Week holiday at $104.20 a tonne recovering from the worst quarterly performance in history.

On Monday upbeat Chinese traders – betting that recents stimulus measures in the world's second largest economy would spur demand – came back from the break and chased the price of the commodity up 6% to $110.40.

The steelmaking ingredient has now clawed back more than 25% of its value since hitting a three-and-a-half year low of $86.70 on September 5.

Iron ore followed the performance of the world's most most active steel contract – rebar for January delivery on the Shanghai Futures Exchange – which hit a high of 3,668 yuan ($580) a tonne on Monday, its best price in more than seven weeks.

Bloomberg on Monday quoted Paul Gray, principal iron-ore market analyst with research company Wood Mackenzie as saying China may need a between 45 million and 55 million tonnes of additional iron ore next year due to increased crude-steel production and restocking by steel mills.

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