Iron ore price soars as China-Australia trade uncertainties linger
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Update time : 2021-05-11 22:17:38
China's iron ore prices have hit record highs, driven by surging steel demand as well as speculation on fluctuations in China-Australia iron ore trade, industry experts told the Global Times. They also warned of a possible price plunge with market liquidity tightening and rising inflation levels.
On Monday, the most active iron ore contract for September 2021 delivery gained 10 percent to close at a record high of 1,326 yuan ($206.2) per ton, data released by the Dalian Commodity Exchange showed. The contracts for February 2022 and March 2022 rose by 9.98 and 9.96 percent, respectively.
In a global context, the S&P Global Platts IODEX, a benchmark assessment of the spot price of physical iron ore, was assessed at a record high of $212.8 per dry metric ton on Friday, the third record in 10 days.
Experts have attributed price surges to uncertainties arising from the suspension of economic dialogue between China and Australia, normally a strong exporter of iron ore to China. This uncertainty could cause futures market speculation, they said.
"There must have been speculation recently, as some overseas investment banks have been increasing investment in Chinese iron ore. The short-term speculation would definitely provide a big lift to the iron ore market," Wang Guoqing, research director at the Beijing Lange Steel Information Research Center, told the Global Times.
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