Iron ore rebounds above US$100 a tonne

Company News

by Glenn Dyer

Iron ore prices exhibited a volatile swing, hovering close to $US100 a tonne, against the backdrop of imminent data from China that could potentially unveil further frailty within its expansive steel sector.

Last week, futures endured a staggering decline of over 13 per cent, plunging investors into uncertainty. Initially, prices dipped by as much as 3 per cent to $US97 a tonne in Singapore, only to swiftly rebound, surging towards $US102. The impending release of industrial production data on Monday held promise to shed light on the prevailing conditions across Asia's largest economy.

Since the onset of the year, iron ore has receded by over a quarter, emerging as one of the most feeble performers among prominent commodities. This downturn has primarily been propelled by apprehensions regarding demand in China, where authorities grapple with an enduring crisis in the nation's steel-dependent property sector. Against this grim backdrop, certain mills have resorted to scaling down their production.

ANZ analysts, including Daniel Hynes, remarked, "Signs of weakness in demand continue to emerge, with Chinese smelters announcing output cuts," underscoring the prevailing concerns.

Meanwhile, the accumulation of iron ore inventories at Chinese ports, the world's leading importer, has been conspicuous, signaling a surplus. Inventories ballooned to 140.9 million tonnes last week, marking the highest level in over a year.

At 9:40 am in Singapore, iron ore for April delivery traded 2 per cent higher at $US101.95 a tonne, indicating a semblance of resilience amidst prevailing market fluctuations.

Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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