Iron ore price approaches $80/tonne

Iron ore price continue to defy analysts’ prediction by approaching US$80 (A$107.51) per tonne on Monday. After price of the key-steelmaking ingredient reached its highest level on Nov. 11 at US$74.12 (A$97.40), the commodity price rose 3 percent to US$79.20 (A$106.45), according to The Steel Index.

The price hike extended the gains made by iron ore for benchmark 62 percent fines to a 13.2 percent expansion in the last four days, says Metal Bulletin. The bulletin notes similar increases in price for lower and higher grade ores.

Reckoned from the start of 2016, the gains made by iron ore stands at 82.7 percent. However, compared to the ebb price of US$38.30 (A$51.49) on Dec 11, 2015, the boost is by 108 percent, Business Insider stresses.

The Steel Index analysts explain the appreciation of iron ore prices to steel mills chasing high grade fines and materials with low silica. They add that the strong global commodities market fueled the on-shore futures of iron ore.

But despite the extended period of strong growth, investors express concern about the significant hike in supply from the majors over the next few years and prospects of a slowdown in demand from China. Analysts still agree that price of iron core would still struggle to remain above US$50 (A$67.25) a tonne by the end of 2016, The Australian reports.

There was only one red session for iron ore price in November as the key-steelmaking ingredient’s price continues its growth to a two-year high of US$79.70 (A$107.2).

Since January to September, Chinese authorities have removed 88 million tonnes of iron ore across China, higher than the initial target of 45 million tonnes for the 12 months of 2016. About 40.75 million tonnes of production capacity were phased out by large steelmakers in China and the rest by smaller producers, Chinese Vice Premier Liu Yandong noted on Thursday.