Iron ore price hits three-month high

The price of iron ore has jumped to a three-month high.

Benchmark iron ore for immediate delivery to the port of Tianjin in China was last trading at $US62.60 a tonne.

The price rise comes as demand from China increased as stockpile shortages emerged.

Reuters reports stockpiles of iron ore dropped 1.3 million tonnes to 85.4 million tonnes as of May 29, the lowest since December 2013.

What will happen next is up for debate, as both bullish and bearish predictions sound about the market.

Most analysts expect the price to falter once more, especially after Gina Rinehart’s Roy Hill mine starts production in September.

Some say anywhere in the region of $US40-$50 per tonne is realistic for the second half of this year.

However, the West Australian spoke to AustCham Shanghai chairman Peter Arkell this week who said China was still planning to import millions of tonnes of the commodity.

"China is shifting to a domestic market," he said.

"The fire has been lit under the economy so we are going to be using all the resources."

Data out this morning by the Pilbara Port Authority showed iron ore exports were up 5 per cent for the month of May, or by 1.9Mt. Total iron ore exports for the month totalled 38Mt. 

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