Aussie dollar climbing… is the iron ore trade back on?
Simandou, one of the world’s most significant iron ore developments, is set to challenge the Pilbara’s dominance soon.
The rally in the price of iron ore went into insane mode on Monday with the Northern China benchmark import price surging nearly 20% in a single day.
The steelmaking raw material was trading at $62.60 per dry metric tonne CFR Tianjin port on Monday, up $10.2o compared to Friday according to data supplied by The Steel Index as Chinese mills scrambled to purchase material on bumper gains in steel prices over the weekend.
The market information service points out that today’s absolute day-on-day rise “is roughly half of the price of contracted iron ore during the early 2000’s under the old ‘annual benchmark’ system, which ended in April 2010.”
Iron ore is now up 46% since the start of the year and an astonishing 69% above multi-year lows of $37 a tonne hit less than three months ago.
Iron ore is a big boys game. Together Vale, Rio Tinto, BHP Billiton, Fortescue Metals and Anglo American produced over 1.1 billion tonnes of iron ore during the past year, cornering more than 80% of the seaborne trade.
Gains in the market value of the top five this year have been even more impressive than the commodity they mine. In fact, the combined market capitalization has gone from $116 billion on February 2 to $178.5 billion.
That’s a $62 billion gain in just over a month.
On a percentage basis Anglo American has been the strongest performer so far this year with a 95% jump in value for a market value of $12 billion. The London-HQ’ed firm’s separately listed iron ore subsidiary Kumba Iron Ore (OTCMKTS:KIROY is up an astonishing 209% this year following an astonishing 39.5% jump in New York just today.
The fortunes of the miners compare to a 5% gain in the S&P 500 year to date.
BHP Market Cap data by YCharts
