The Australian Stock Exchanged yesterday closed at a five year high on the back of higher than expected Chinese trade data which rallied mining stocks.
Official figures show Chinese exports rose almost 15 per cent last month, nearly double what was originally expected, while imports advanced 16.8 per cent, ABC reported.
The results imply economic strength, but some analysts remain doubtful saying the numbers don’t match some of China’s trading partners.
But according to economists at Westpac, the data is legitimate.
The results pushed mining stocks up, with Atlas Iron finishing 13 per cent higher and Fortescue boosting 5 per cent, while BHP Billiton added almost 2 per cent and Rio about 3 per cent.
Iron ore exports from Port Hedland also rose 4 per cent in April, as shipments to Taiwan more than doubled. Major miners like BHP, Fortescue, and Atlas use Port Hedland to export their products, making it one of the world’s largest iron-ore terminals.
In total, more than 26.0 million metric tonnes of iron ore was shipping during April, up from 24.9 million tonnes in March, Port Hedland Port Authority said.
WPG chief Martin Jacobsen said he doesn’t expect Chinese growth to drop below 7.5 per cent per annum for the next 15 years, Business Spectator reported.
Jacobsen said India’s restrictions on iron ore exports coupled with Chinese demand will see 62 per cent grade iron ore prices to be $US110 a tonne ore and “maybe drop off lower than that in the longer term.”
Anglo-Australian miner Rio Tinto expects to see a rise in Chinese iron ore sales as the country’s demand for steel continues to rise, The Australian reported.
China’s demand for steel is expected to rise at a compound annual growth rate of 3 per cent over the next ten years, Alan Smith, president of Rio Tinto Iron Ore Asia, said yesterday.
He added that despite analysts concerns, he expects China’s annual steel demand will continue to expand and peak at about 1 billion tonnes in 2030.
Rio shipped 147 million tonnes of iron ore to China last year which Smith expects to be surpassed this year.