Iron ore price closing in on $60

The price of iron ore built on recent gains on Thursday as hopes for a revival of Chinese infrastructure spending boosted commodity markets and the outlook for the sector.

The benchmark 62% Fe import price including freight and insurance at the Chinese port of Tianjin added 2.8% to $58.50 a tonne, a fresh 10-week high according to data provided by The SteelIndex. Iron ore is now trading 30% above record lows for the spot market hit July 8, but remains nearly 18% year to date.

Metal Bulletin’s benchmark 62%-index at the ports of Qingdao-Rizhao-Lianyungang in China gained $0.83 to just over $59 while lower grade 58% fines climbed 1.4% to $51.78.

On futures markets the steelmaking raw material enjoyed another strong trading day with the most active January-delivery contract on the Dalian exchange adding 3.1% to $64.30 a tonne following yesterday’s 4% uptick. In Singapore December futures made another 2% jump.

The latest rally was sparked by by comments from China’s finance ministry this week saying it would make the appropriate policy changes, boost infrastructure spending and speed up reform of its tax system to boost flagging economic growth.

After a 14% decline in Chinese imports in August to 74.12 million year to date imports of 613 million tonnes are tracking just below 2014’s record-breaking levels according to customs data released last weekend.

However the static trade data comes against the backdrop of a steady decline in stockpiles at the country’s major ports. Inventories are now down to late 2013 levels falling to 80.1 million tonnes this week. That’s down from a peak above 110 million tonnes hit a year ago 2014.