The doom-and-gloom surrounding the future of the price for iron ore remains on the back burner after its value spiked more than 7 per cent overnight.
Iron ore has been forecast to average below $US50 a tonne by the Department of Industry, Innovation and Science in 2018.
If the commodity’s recent form is any guide, its value will need to fall substantially by next year for that to happen.
The latest trading session was another impressive one for iron ore, with it surging 7.2 per cent to $US73.70 a tonne, its largest jump since November 2016.
News out of China was the main reason for the significant increase in the iron ore price, a Patersons Securities note explained.
“Chinese iron ore futures prices ratcheted higher in Monday Asian markets, as the July official manufacturing PMI data for the globe’s number-two economy revealed further expansion in its steel sector,” Patersons reported.
Iron ore’s performance has been positive for several weeks now. It soared through the $US70 a tonne mark in mid-July for the first time since April.
In February, iron ore reached its 2018 high above $US90 a tonne, only to fall below $US53 a tonne in June.