Iron Ore Price Rises Again

Iron ore futures traded 5.5% higher in China, pushing aside the February 21, 2017 high.

Experts see 3 reasons why iron ore prices are rising:

First, investment in China's fixed assets rose in January and February, while demand for steel remains solid. Private sector investment, which accounts for 60% of total investment, increased 6.7% from a year earlier, the highest growth rate in a year. Investment in the real estate sector was particularly strong, increasing 8.9% year on year in the first two months of the year. Meanwhile, investment in infrastructure that also uses a lot of steel is up an impressive 21.3% from a year ago, thanks to local community projects.

Second, on the Dalian Commodity Exchange, for almost a month of contracts for iron ore from May to July, it is planned to increase the volume of transactions by opening contracts with foreign investors.

Third, stocks of iron ore in major Chinese ports declined slightly, down 0.6% from a week ago, to 116.9 million tons.

This morning, Fortescue Metals Australia (FMG.Australia) is up 5.7%, BHP Billiton (BHP) is up 1.1% and Rio Tinto (RIO) is up 1.9%, Vale in Brazil (VALE) gained 0.2%.