The iron ore price has topped $US80 a tonne following a huge infrastructure push in China, the AFR reports.
According to the Metal Bulletin, iron ore to be delivered to China’s Qingdao port increased 1.5 per cent to $US80.83 – the first time it has reached above $US80 in two years.
Chinese steel futures rose more than six per cent – the highest in 31 months – as investors increased bets on the strong investment in infrastructure and property sustaining China’s demand. This includes a 247 billion yuan ($47 billion) railway project to interconnect Beijing, Tianjin, and Heibei.
This infrastructure focus not only boosted iron ore, but also zinc and lead.
Steel demand has also surged due to China’s strong property sales, wth real estate investment rising, particularly during October. Construction steel product rebar rose up to 6.4 per cent to $US469 a tonne.
Some economists however said the continued increase in the iron ore price will be short lived.
“The upward trend that we have seen in iron ore prices this year is positive but what a lot of the key producers…are cautioning is they expect that is has been a short term blip and they expect prices to ease somewhat,” Commsec chief economist Craig James told The Australian.