This year’s iron ore rally is expected to continue due to the weakening US dollar and supported by Chinese growth, Prestige Economics president Jason Schenker says.
Schenker made a bullish call toward the end of last year, which to date has proven right, Bloomberg reports, saying iron ore would trade at around $60 a tonne, with an average price of $US55 this year.
At the time of publishing the price sits at $US53, and is expected to hit $US62 in 2017, and $US72 in 2018, Schenker said.
Iron ore’s price has sky-rocketed this year, breaking three years of declines and stagnation thanks to increasing steel demand, in part from China’s property boom and restocking by Chinese steel mills, coupled with historically low port stockpiles levels.
This comes after iron ore reached a three month high of nearly $62 per tonne on Monday, despite increased shipments through Port Hedland in July.
Figures from The Metal Bulletin Index note the import price of 62 per cent iron fines at the port of Qingdao added almost a dollar to $61.56 a tonne; creating an average price of $61.28.
This increase came at the same time as Port Hedland’s latest shipping figures which showed a July throughput of 39Mt, nine per cent more than the same time last year. Iron ore exports were at 38.7Mt, a 10 per cent increase from the previous year.
Iron ore delivered to Qingdao reached $US59.36 a dry tonne on Thursday, a 36 per cent increase in 2016, The Metal Bulletin recorded. These increases came as China’s daily steel output rate hit a record, and steel product shipments recorded near all-time highs.