Ayesha de Kretser
Panic buying is driving the price of Australian iron ore well past $US150 a tonne.
Chinese steel mills are fretting over vanishing spot iron ore supplies from India and fearing that cyclones will disrupt supply.
This has helped a major rebound in Australian iron ore prices even in the middle of the traditional low season for Australian and Brazilian exporters.
Analysts have warned that India will export little, if any, ore in 2013.
“India is out at the moment and it’s usually strong when Australia and Brazil are weak,” Shanghai-based CLSA analyst Ian Roper said.
“I can’t imagine where prices will go if there’s a cyclone off Western Australia – and it’s already raining heavily in Brazil.”
The spot price for iron ore rose $US3.50 a tonne to $US153.30 a tonne on Friday, according to The Steel Index.
Atlas Iron commercial director Mark Hancock said Chinese customers had become increasingly concerned about securing volumes or iron ore for the year as prices rise and optimism for steel demand also grows.
Prices have jumped 5.8 per cent since December 31, as Chinese lending ramps up after the end of 2012.
“There was no liquidity in the last two weeks of the year, so even if you wanted to buy ore you couldn’t,” Mr Roper said.
http://www.afr.com/p/business/companies/iron_ore_rush_as_china_gets_back_4nQrpEzEQ9h7twZkKthl
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