Better Chinese steel prices have allowed iron ore prices to float higher this week and they appear well supported by rising steel production in the Asian nation.
Cargoes of 62 per cent-grade iron ore for delivery to China are trading at $US174.55 per tonne ($229.65/tonne) this week, according to Metal Bulletin.
“Iron ore futures have been supported in recent weeks by stronger steel prices, as authorities look to curb output to contain emissions,” said analysts at ANZ Bank in a report.
But they went on to stress that China’s government may intervene in the market to dampen inflation which is feeding through to higher producer prices.
“However, traders may be concerned by moves from authorities to strengthen controls on raw material prices, which has been pushed by inflation concerns,” said ANZ Bank.
Shipments from WA’s main iron ore hub soared in March after a slight dip in February, as Chinese steel production increased after traditional Lunar New Year festivities.
“Exports from Port Hedland rebounded to 46.7 million tonnes last month, from a near two-year low in February. Shipments to China were up 24 per cent month on month to 38.1 million tonnes,” said ANZ Bank.
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