The spot price of iron ore to be delivered to northern China has risen almost 25% in the last three weeks to hit a 19-month low as the market takes an optimistic view of Chinese steel demand.
The benchmark rating of 62%, assessed by commodity price reporting agency Argus, rose to $108.60 on Wednesday from $87 on November 18, the lowest since May last year.
Iron ore is still well below the record $235.55 per tonne on May 12 this year, but the recent rally underlines that the market believes the worst is over for steelmaking material.
China buys about 70% of the seaborne iron ore and, as usual, China is running the current rally. However, it is questioned whether the increase in prices is based on hope rather than reality.
The fact that iron ore imports in November increased by 14.6 percent compared to October and amounted to 104.96 million tons is seen as one of the factors that increased the price. December was the strongest month since July 2020.
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