Iron ore prices are gathering steam as confidence over the outlook for China's steel demand increases, outweighing bearish factors such as potential winter production curbs and India lowering iron ore export taxes.
The price of spot 62% iron ore for delivery to north China MTIOQIN62=ARG, as assessed by commodity price reporting agency Argus, rose to $99.50 a tonne on Nov. 18, close to the $100 level last seen on Sept. 15.
The price has gained 26% since hitting a three-year low of $79 a tonne on Oct. 31, taking heart from China's efforts to stimulate the world's second-biggest economy and ease some of the strict COVID-19 containment measures that have hamstrung growth this year.
In addition to optimism that steel-intensive sectors such as construction and infrastructure will accelerate next year, there are some other bullish factors for iron ore and steel.
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