China iron ore surges to record high on rosy demand outlook

Molycorp's mould-breaking deal with Neo Material Technologies sent its shares rocketing in New York on Friday and some industry observers say the tie-up creates a vertically integrated company that will transform the industry. Others see REE prices continuing to drop with some already down 70% and China's grip on the market undiminished – exports could double this year and domestic production continues to ramp up.

Molycorp and Neo Material Technologies Thursday announced the signing of a definitive agreement under which Molycorp will acquire Neo Materials for approximately CDN $1.3 billion. This will create one of the most technologically advanced, vertically integrated rare earth companies in the world.

China, the world’s largest supplier of rare earth, may almost double exports this year, meeting quotas set by the government as lower prices continue to stimulate demand.

Brazilian mining giant Vale (NYSE: VALE) has contacted China's second largest container line China Shipping Group to negotiate a way for its very large ore carriers (VLOCs) to dock in Chinese ports again

The mining sector's bellwether companies were all beaten down on Monday after China's premier Wen Jiabao delivered a downbeat outlook for the world's second largest economy adding that there were "new problems" to deal with.

Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose to their highest in nearly a decade, data showed yesterday, suggesting oversupply in top copper consumer China where demand has been slower than expected.

As Canadian exports of iron ore and uranium to China continue to increase dramatically, Beijing will benefit from higher-quality ore and diversification of supply sources, predicts economist Patricia Mohr in the latest Scotiabank’s Commodity Price Index.

Should the supermajors join the new platform it would mark the latest shift in the global iron ore business which has been completely transformed in less than a decade.

During the first eleven months of 2011, global usage grew by only 2.7% over 2010, but accelerated in October-November to 12% due to an jump of 38% in China.