Iron ore price rises on pre-holiday restocking, China stimulus hopes
"Winter restocking of iron ore among steel mills is still underway, so we believe ore prices will find some support in the near term," analyst says.
With Chinese and US traders on a break, the iron ore market took a breather on Monday after wild price swings saw the steelmaking raw material fall to a more than seven-month low on Friday.
The Northern China import price of 62% Fe content ore is down 15% for in May trading at $57.80 per dry metric tonne, the lowest since mid-October according to data supplied by The Steel Index.
“There may be a slowdown in demand from the housing sector but the infrastructure sector will still be sustained”
Benchmark prices are down a whopping 37% from their February highs when ore came to within shouting distance of triple digits.
Bloomberg quotes closely followed emerging markets investor Mark Mobius as saying volatile iron ore prices and the fundamentals of the industry have to be looked at separately.
Mobius, executive chairman of Templeton Emerging Markets Group, said the while fundamentals have bee stable, the price is “subject to all kinds of external factors” including how traders are betting on the price going up or down:
“I don’t see a big, big decline in the demand for iron ore going forward, I think there’ll be continuing demand not only in China but other parts of the world,” said Mobius, who’s spent over 40 years tracking emerging markets. “If you look at Chinese imports of iron ore, it’s almost a straight line, continuing to go up,” adding that in contrast the price “is going all over the place.”
“There may be a slowdown in demand from the housing sector but the infrastructure sector will still be sustained,” Mobius said. “If the One Belt, One Road program proceeds, there’ll be continuing demand.”
