Economy, Business And Markets

Iron Ore Prices Reverse Months-Long Downtrend

Iron Ore Prices Reverse Months-Long DowntrendIron Ore Prices Reverse Months-Long Downtrend

Iran’s iron ore prices, on the decline for most of the past year, have started to regain their momentum, reaching $54.5 per ton last week, which is $2.3 higher than the prices on April 7.

The outlook for the raw steelmaking material also looks good on the global front. Iron ore, with 62% purity, delivered to Qingdao in China jumped 2.1% to $60.48 per ton on Wednesday, recording its highest since March 8, according to Metal Bulletin.

This is a major turnaround from 2015, when iron ore prices continuously plummeted because of a global glut and weakening steel demand in China, Bloomberg reported.

The last months of 2015 were the dreariest for the industrial material. Prices dropped to record lows of $38.5 per ton in December after a steady three-month decline.

Iron ore brought about a surprise rally in 2016 after Chinese policymakers signaled that they are prepared to support growth, mills boosted purchases even as port stockpiles climbed and steel prices advanced.

Meanwhile, China’s steel output in March hit a record high of 70.65 million tons, rising 2.9% compared to the same period of 2015.

Iron ore’s rally from a record low is not sustainable, however, as global output is set to increase even further, according to Sam Walsh, the CEO of Rio Tinto Group, the world’s second-biggest exporter of iron ore.

“Prices may fall in the second half, as new supplies offset improving demand from China,” he said.