Iron ore back past $US60 a tonne

The price of iron ore has moved past $US60 a tonne for the first time in eight weeks.

At the end of the latest session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US60.10 a tonne, up 1.7 per cent.

The recovery comes after the commodity reached a historic low of $US48.70 a tonne on April 2.

But sentiment has since shifted as major iron ore miners Vale and BHP Billiton moved to stop their accelerated ramp-ups.

This will stop around 50 million tonnes of iron ore hitting the seaborne market.

At the same time China has looked to stimulate its economy, which will mean more steel production, and more iron ore demand.

However analysts remain cautious and warn that an oversupply of iron ore is still on the cards. Some predict the supply will outstrip demand by some 45 million tonnes this year and 215 tonnes by 2018.

On Wednesday, UBS forecast the price of iron ore will trade at just $US45 a tonne in the second-half of 2015.

“Recent cuts help, but the market is expected to remain in an albeit-smaller surplus over the medium term,” UBS said.

“Supply cuts are not sufficient to drive higher prices when operators are cutting costs, and as demand remains weak.” 

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