The spot price of 62% iron ore for delivery to northern China increased to $128.80 a tonne on Monday, remaining just below the peak of $129.50 reached on January 30 in 2023.
The price increased by 5.7% last week and has now reached a level of 63% higher than the 2022 low of $79 per tonne on October 31.
The gains are due to the restocking of steel mills in China, which buys about 70% of the global seaborne iron ore and produces half of the world's steel.
Iron ore inventories at Chinese ports increased to 140.9 million tonnes in the week to February 17 from 138.35 million the previous week and to 130.2 million on October 14, a pre-winter low.
China's iron ore inventories usually increase during the winter period due to slowing construction activity, but inventories tend to decrease from March due to increased steel production to meet rising demand as construction work accelerates.
With Beijing trying to revive the economy after ending the strict zero COVID policy that hindered growth last year, expectations are that infrastructure and construction activity will rebound from the second quarter.
China's steel prices are also increasing on expectations of stronger demand. Shanghai Futures Exchange rebar contracts SRBcv1 closed at 4,167 yuan ($608.32) per tonne on Monday, up 3.4% from last week.
Comments
No comment yet.