Iron ore hits $130/t ahead of Chinese New Year

iron ore

The price of Australian seaborne 62 per cent iron ore fines has topped $US130 per tonne for the first time since October 2021, thanks to increased Chinese steel production.

According to Mysteel, these seaborne fines were trading at $131.5 per dry metric tonne before selling portside for up to $134 per wet metric tonne in the Chinese port of Qingdao.

An iron ore trader in North China told Mysteel the market was “rather bullish” to begin the year.

“Recently, iron ore buying among steelmakers increased slightly – especially after some of them were permitted to lift their production,” Mysteel quoted.

Blast furnace utilisation rate among 247 Chinese steelmakers rose for the third consecutive week as of January 6, now up to 77.89 per cent.

But the upcoming Chinese New Year towards the end of January and beginning of February should see the iron ore price continue to be volatile while steelmakers take time away from work.

Wood Mackenzie senior analyst Kim Christie told Australian Mining he was pessimistic about the iron or price in 2022, as a multitude of factors affect Chinese steelmakers.

“Although we saw a spike in steel demand last week, it has primarily been driven by restocking ahead of the Chinese New Year,” Christie said.

“With Chinese steel demand uncertain over 2022, on balance, we see more downside than upside risk for iron ore 2022.”

The rise in iron ore prices recently allowed a few smaller Australian iron ore miners to restart operations, after depressed prices saw them become unfeasible in the second half of 2021.

This included GWR Group at its C4 mine and CuFe at its JWD mine, both in Western Australia.

At the time of writing, the seaborne price for 62 per cent Australian iron ore fines had weakened slightly to $US127.25 per dmt at Qingdao. 

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