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Iron ore prices have continued to rise sharply following ongoing Chinese industrial output, Prices for iron ore cargoes with a 63.5% iron content for delivery into Tianjin jumped to $172 per tonne in the third week of January. The highest level since October of 2011. At the same time Rio Tinto saw a 2.4% rise in Q4 iron ore shipments. 

BHP Ironore

Image via @teconomics

Iron ore prices have continued to rise sharply following ongoing Chinese industrial output, Prices for iron ore cargoes with a 63.5% iron content for delivery into Tianjin jumped to $172 per tonne in the third week of January. The highest level since October of 2011.

Iron Ore 9 year high

China imported 1.17 billion tonnes of iron ore, beating its previous record of 1.075 billion tonnes in 2017 despite a decline in December shipments. The resumption of production by BHP and Vale in Brazil is likely to release the pressure on prices. Iron ore prices were squeezed last year due to the dam collapse at Vale’sCórrego do Feijão mine in Brazil. The rapid spread of the coronavirus in Brazil also hurt iron ore production again and pushed prices higher.

Australia's Rio Tinto is benefiting from the surge in Iron Prices on Tuesday after they reported a 2.4% rise in fourth-quarter iron ore shipments, helped by the industrial activity in top consumer China which the company said had returned to pre-pandemic levels. The Australian dollar has risen along with iron prices,

"In China, the industrial sector has recovered and is now at pre-COVID levels due to the rapid deployment of stimulus," Rio said in a statement. "China's buying remains robust despite ongoing localised impacts from COVID-19 in some regions. Demand in Japan, Korea, Taiwan and Europe is recovering."

Rio shipped 88.9 million tonnes (Mt) of iron ore in the three months to December, up from 86.8 Mt a year earlier and slightly above UBS' forecast of 88.6 Mt. It said it expects to ship between 325-340 Mt of the steelmaking ingredient this year, compared with the 331 Mt it shipped in 2020 and a UBS estimate of 337 Mt.

Source: abs Reuters

The TradersCommunity News Desk

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