Iron ore fines prices traded this week at $US154.50 per tonne, up $US7 per tonne on weekHard coking coal prices were down 50c this week at $US92 per tonne at Queensland portsChina’s reinforcing bar price is at $US624.75 per tonne, up $US13.40 per tonne on a week ago Iron ore prices briefly touched $US160 per tonne this week — their highest for nine years — as demand from China for the steelmaking commodity outpaced available supply in the seaborne market. Spot prices are still up $US7 on-week at $US154.50 per tonne ($205/t), a level last seen in mid-2011, at the height of the China-based commodity boom. The wobble in iron ore prices may have been sparked by media reports that China’s Iron and Steel Association has spoken out about the high cost of iron ore. The CISA, which represents China’s larger steel companies, has issued a call for government action to intervene in the market. “The iron ore market pricing mechanism has failed and steel companies unanimously call on the State Administration for Market Supervision and the China Securities Regulatory Commission to take effective measures to intervene… in a timely manner and crack down on possible violations of regulations,” said the CISA in a statement. Market analysts said, however, that it is China’s rising demand created from infrastructure construction that is fuelling the strong market for iron ore. “There is no doubt that Chinese demand has been stronger than expected amid fiscal stimulus measures,” ANZ bank analyst Hayden Dimes told CNBC. China’s strong pull on iron ore exports is expected to carry on for some time, until it winds back its economic stimulus program. “In our view, Chinese steel output will continue to grow at a moderate pace through 2022-2023, and coupled with a recovery in ex-China demand, will require high cost supply,” said analysts at UBS bank in a report. ASX iron ore miners and explorers benefit Higher iron ore prices are starting to be reflected in the share prices of major producers on the ASX, and even in the prices of some iron ore explorers. BHP Group (ASX:BHP) this week saw its share price touch $42.50 per share, its highest since 2011, while Rio Tinto (ASX:RIO) shares hit a 12-year high at $116 per share last week. Another iron ore shipper, Fortescue Metals Group (ASX:FMG) traded at an all-time high of nearly $23 per share on Friday, although its price has now slipped a little. The current weakness in the Australian dollar exchange rate to the US dollar is magnifying the flow of revenue to miners from higher iron ore prices. Each tonne of iron ore shipped to China earns the shipper $205 per tonne in Australian currency, and much higher than in US currency terms. The share prices of a raft of junior exploration companies are benefitting from the spike in iron ore prices, such as Shree Minerals (ASX:SHH)
Ann: NBR Iron Project Update, page-312
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