Jasmine Ng
Iron ore climbed to the highest in a month on speculation China’s plans to speed up $US1.1 trillion of infrastructure projects this year will boost demand amid a decline in port inventories in the world’s largest user.
Ore with 62 per cent content delivered to Qingdao, China, rose 0.9 per cent to $US71.49 a dry metric ton, the highest since December 5, data from Metal Bulletin Ltd. show. Prices slumped to $US66.84 on December 23, the lowest level since June 2009, and last week rebounded 5.8 per cent.
While the raw material lost 47 per cent last year as global output expanded, it opened 2015 with the biggest weekly gain in 18 months amid speculation China will take more steps to spur growth. The country is accelerating 300 infrastructure projects this year as part of a broader 10 trillion yuan ($US1.6 trillion) plan that will run through 2016, according to people familiar with the matter. A sixth week of decline in port stockpiles signal that imported supplies are being absorbed.
“Current prices of around $US65 to $US75 a ton could prove to be a low point for iron ore,” Paul Bloxham, chief Australia economist at HSBC Holdings in Sydney, said today before the price data was released. “The fall in port inventories is a positive sign as the restocking process should support iron ore price in the coming months.”
Stockpiles at Chinese ports shrank 0.9 per cent to 100.6 million tons as of January 2, according to Shanghai Steelhome Information Technology Co. That’s the lowest level since February 14, and a sixth weekly drop is the longest run of declines since April 2013. Inventories contracted 12 per cent since peaking at 113.7 million tons in July.
China’s investments will be across seven industries including oil-and-gas pipelines, transportation and mining, according to people familiar with the matter, who asked not to be identified. The world’s second-largest economy, which cut interest rates in November, buys two-thirds of seaborne ore.
Bloomberg
PDY Price at posting:
0.7¢ Sentiment: None Disclosure: Not Held
FMG Price at posting:
$2.79 Sentiment: Hold Disclosure: Not Held
FMS Price at posting:
1.9¢ Sentiment: Hold Disclosure: Not Held
RTA Price at posting:
19.0¢ Sentiment: Buy Disclosure: Held
