iron ore price going gangbusters

pity about the sp of gwr- languishing at a pathetic 41.5c

Iron Ore Trades at 4-Month High on China Price Accord Concern
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By Jesse Riseborough

June 10 (Bloomberg) -- Cash prices for iron ore into China, the world’s biggest buyer, are trading at the highest in almost four months on concern steel mills won’t be able to win a steeper cut in contract prices than Japanese and South Korean rivals.

Spot prices for ore delivered to China jumped 11 percent to $76.50 a metric ton in the week ended June 5, according to Metal Bulletin prices, the highest since Feb. 20. That’s the biggest weekly gain in 20 months.

“It is realization that the Chinese are probably unlikely to get a bigger cut” than the 33 percent reduction Rio Tinto Group agreed last month, Mark Pervan, a senior commodity strategist at Australia and New Zealand Banking Group Ltd. in Melbourne, said today. “Traders are still taking advantage of what looks like a cheap market compared to the new contract price so hence you the see the pick-up.”

Rio Tinto, the world’s second-largest iron ore exporter, last month agreed to sell ore under annual contracts to Japanese and South Korean mills for about $61 a metric ton. Freight costs for vessels carrying ore to China from Australia are about $17 a ton, according to SSY Futures Ltd.

China’s iron ore imports jumped 33 percent to 57 million metric ton in April from a year ago, according to customs data. A surge in lending and investment and rising retail sales have spurred confidence that Premier Wen Jiabao’s 4 trillion yuan ($585 billion) stimulus package is reviving growth in the world’s third-biggest economy.

“There seems to be increasing signs that the economic conditions in the market are starting to improve, we are now starting to see a number of green shoots coming through,” ANZ’s Pervan said.

To contact the reporter on this story: Jesse Riseborough