Demand for Australian iron ore boosted by the onset of China's winter Updated 4 hours 38 minutes ago
PHOTO: Demand is strong for Western Australian iron ore exports. (7pm TV News WA) RELATED STORY: $750 million windfall expected as iron ore prices rise MAP: Karratha 6714 A business analyst is forecasting strong demand for Australian iron ore to continue as cold weather in China halts domestic supply.
Strong demand for the mineral has seen its price per tonne increase by $19 in four months.
Combined with the lower Australian dollar, it could see the Western Australian Government reap about $750 million in additional royalty payments, if the high prices continue for the remainder of the financial year.
Philip Kirchlechner says freezing temperatures will cause Chinese mills to restock with imported iron ore.
"I think in the short term there will be very strong demand, partly driven seasonal now, because the temperatures are falling in China, the winter is coming so domestic iron ore production in China, which is mostly in the north, will decline," he said.
It is in stark contrast to this time last year when iron ore prices slumped, punching a massive hole in the State Government's budget.
WA Premier Colin Barnett said yesterday, the strong demand from China, combined with the high commodity price, is good news.
"The stronger the iron ore price, the stronger any mineral price and the lower the Australian dollar, the better it is for the bottom line and the outcome of the state budget so certainly this helps our budget," he said.
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