Iron ore prices continued its remarkable rally after China announced another stimulus package aimed at boosting the economy. It jumped to a high of $129.55 on Thursday, its highest point in over 10 months. It has soared from the December low of $92.7.
Iron ore is an important commodity that is used to manufacture steel, one of the most important metals globally. Steel is mostly used in the construction industry, with China being the biggest buyer.
Iron ore price has been in a strong rally recently as signs emerged that the Chinese economy was recovering. The most recent data by the National Bureau of Statistics (NBS) revealed that the country’s industrial production and retail sales bounced back in October.
Iron ore and other industrial metals like silver and copper do well when the Chinese economy is outperforming. Indeed, copper price has risen by almost 10% from its lowest point this year. Silver is up by over 14% from its October lows.
The most recent catalyst for iron ore prices is the decision by China’s government to end the ongoing housing crisis. The government is now ramping up pressure on banks to infuse over $446 billion in the housing sector.
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