Iron ore futures have climbed for a sixth consecutive day, buoyed by expectations of increased demand from China. The price of the steel-making raw material surpassed $US107 per tonne, reaching levels not seen since February. This surge follows the resumption of operations at Chinese steel mills, which had been temporarily shuttered during a recent military parade. The renewed activity in the steel sector is a key driver behind the rising iron ore prices.
Adding to the upward pressure is the anticipated need for steel mills to replenish their inventories after a period of peak demand. Recent data indicates that China’s iron ore imports remain robust, with August volumes reaching 105 million tonnes, marking the second-highest monthly figure for the year. These strong import numbers underscore the continued importance of iron ore in supporting China’s industrial output.
ANZ noted that sentiment was further bolstered by reports concerning Rio Tinto and the Guinean government. Rio Tinto, a leading global mining group, is reportedly facing pressure from the Guinean government to invest in local steelmaking facilities near its Simandou iron ore mine. This development suggests a potential shift in government policy towards encouraging domestic processing of raw materials rather than solely relying on exports.
