If we think copper, zinc, and even aluminum have performed well this year, none of them are a patch on iron ore.
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Iron ore prices rise
China’s iron ore imports fell for the second straight month in November. Imports dropped by 8.1% from a month earlier, Reuters reported.
However, prices still rose strongly.
China brought in 98.15 million metric tons last month, compared with 106.74 million tons of imports in October. Nonetheless, the November total rose 8.3% from November 2019.
The report went on to say that for the first 11 months of the year, iron ore imports stood at 1.07 billion tons. Meanwhile, full-year imports totaled 1.06 billion tons in 2019.
Imports seem to be constrained due to availability rather than lack of demand. Quite the contrary, prices are continuing to rise.
Spot iron ore hit the highest level since December 2013 last week. The Dalian Commodity Exchange price climbed a further 2.8% to Yuan 928 per metric ton (over $141 per ton). That is a rally of 50% since this time last year. The price is also up 72% since the end Q1 China lockdown crash pushed prices below $80 per ton.
Infrastructure stimulus investment and a strong construction market have supported steel prices. As a result, steel mills have been producing flat out and drawing down port stocks of raw materials like iron ore.
According to another Reuters report, imported iron ore stocked at 45 Chinese ports dipped for the fourth week over Nov. 27 to Dec. 3. Imports fell by 1.6 million tons from a week earlier to about 124.5 million tonnes, mainly due to lower arrivals.