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http://www.theaustralian.com.au/bus...regain-us70-mark/story-e6frg916-1227141565347

Iron ore price firms to regain $US70 mark

DANIEL PALMER

BUSINESS SPECTATOR

DECEMBER 02, 2014 7:54AM

THE price of iron ore has returned to levels above $US70 a tonne after a weak November trading period forced the commodity down to as low as $US68 a tonne.

At the end of the latest offshore session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US70.60 a tonne, up 1.1 per cent from its previous close of $US69.80 a tonne and almost 4 per cent above the five-year low of $US68 reached last week.
The gains came despite renewed concerns about the Chinese economy after the HSBC purchasing managers’ index (PMI) came in at 50.3, below expectations of a 50.6 reading.
The data was the latest sign of cooling manufacturing growth in China and helped drive commodity price weakness during Asian trade.
However, bargain-hunters stepped in overnight to bid up commodities, with gold, oil and iron ore all rallying at least one per cent.
Iron ore has now seen three straight positive trading days since hitting its five-year trough on Wednesday last week, with the recovery following a more positive outlook from iron ore heavyweight Vale.
“There was a lot of volatility in prices this year and the market is undershooting at the moment and this will bring about a correction,” Vale boss Murilo Ferreira said last week.
“This correction will come through the closure of many inefficient miners of high cost and poor quality iron ore.”
The commodity’s weak 2014, during which it has lost over 45 per cent of its value, has been predicated on rising supply as Vale, BHP Billiton and Rio Tinto all sharply increase production.
The moves have been criticised by many analysts but the miners have remained steadfast in their plan to raise supply.
“Even the iron ore price where it is today can induce more volume,” BHP’s president of iron ore, Jimmy Wilson, said over the weekend. “If that volume doesn’t come from our business, it’s going to come from others around the world.”
The UK-listed stock of Rio and BHP still lost ground in London trade despite the iron ore price recovery, with Rio giving up 1.2 per cent and BHP slumping 2.2 per cent.
In local trade yesterday BHP stock lost over 5 per cent in sinking to a five-year low.