Iron Ore Surprises In November
A mixed month for commodities with iron ore a surprise star, while oil was solid but other metals were weaker.
Many analysts had forecast a sell off in iron ore in November as the Chinese government production caps (to lower pollution) which cut steel production in the north and northeast of the country (near Beijing).
But that didn’t happen and after a dip to $US58 a tonne at the end of October, the Metal Bulletin price soared more than 17% to just over $US68 on Thursday when it rose 21 cents to $US68.13 a tonne.
That has taken every analyst by surprise - although the bears at Goldman Sachs are still forecasting a drop back towards $US50 a tonne next year as more production appears in the market.
US January West Texas Intermediate crude futures added a cent to $US57.31 a barrel in late trading as OPEC renewed its production cap to the end of 2018, but with a review slotted in for June next year which could in effect cap any sustained price rise.
Prices for the contract were up nearly 5% for the month, the third-consecutive monthly rise in a row.
In Europe January Brent the front-month contract which expires at the session’s settlement, was up 53 cents, or 0.8%, to $US63.64 a barrel.
For the month, the contract was up around 4.4% higher. February Brent which will become the front-month contract, added 9 cents, or 0.1%, to $US62.62 a barrel.
Comex February gold fell $US9.50, or 0.7%, to settle at $US1,276.70 an ounce. The February contract ended less than 0.2% higher for the month of November.
Elsewhere on Comex, March silver futures eased 0.5% to $US16.474 an ounce and a loss of 1.4% for the month, based on the most-active contracts, according to FactSet figures.
And Comex March copper fell less than 0.2% to $3.064 a pound, with most-active contract prices down about 0.9% for November.
LME copper prices fell 1.2% in November, nickel fell more than 9%, aluminium dropped 5.2%, zinc lost 3.5%, lead fell 2.3% but tin was up 1.2%.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.