Iron Ore Breaks Back Above $70 Barrier
Commodities started December with a surge on Friday, led by November’s star, iron ore. Copper, lead, zinc and gold also reported gains on Friday, but many still eased over the week.
But not iron ore where the Metal Bulletin China price jumped by nearly $US2 a tonne on Friday to top the $US70 a tonne level for the first time since September 18.
The price ended at $US70.11 a tonne, up 2.9% on the day and 3.2% for the week.
It was also after a 17% plus jump for November which was contrary to the gloomy forecasts from analysts based on the production cuts imposed in northern China on the steel making, processing and raw materials sectors.
At the same time, coking coal prices also rose strongly last week especially with the Metal Bulletin reporting a rose to around $US214.35 a tonne, - up 1.6% on Friday.
Prices broke through $US200 a tonne midway through last week and were up around $US20 a tonne or well over 10%. Australian premium (hard) coking coal was trading around $US185 a tonne in early November.
The strength of iron ore and coking coal prices and an easing in the value of the Aussie dollar helped the Reserve Bank’s Commodity Price Index rise 2.2% in November in Australian dollar terms.
Elsewhere, oil rose again on Friday (see separate story) while gold also rose as the US dollar weakened on the news that Michael Flynn, President Trump’s former national security adviser, had pleaded guilt to charges of lying to the FBI and was now co-operating in its probe into links between Trump and Russia.
That news raised concerns over further upheaval in President Donald Trump’s administration and the movement of the President’s tax package towards a vote in the Senate.
Comex February gold climbed $US5.60, or 0.4%, to settle at $US1,282.30 an ounce.
For the week, the contract was down about 0.7%.
Elsewhere on Comex, March silver futures fell 0.5% to $US16.388 an ounce and a weekly loss of 4%.
March copper rose 0.9% to $US3.093 a pound, leaving prices down about 4.1% on the week.
On Friday, the US Dollar Index lost 0.2% at 93.88. It fell nearly 1.6% for November. It traded 0.1% higher on the week. The Aussie dollar regained the 76 US cent level as a result and ended around 76.10 US cents.
In London lead and zinc touched multi-week highs on Friday on the LME, thanks to renewed supply concerns as China steps up pollution inspections on processing operations.
Reuters said most other industrial metal prices also rose on Friday, supported by strong manufacturing data in much of Asia and Europe and the weaker US dollar.
Production of lead and zinc, which are usually found in the same deposits and processed out of the same ore, is expected to be hit in China by a crackdown on smog after authorities ordered the shutdown of polluting facilities.
Three month lead on the London Metal Exchange rose 3% to $US2,544 a tonne by the close, its highest since November 10, according to Reuters, while three month LME zinc finished 3% higher at $US3,249 a tonne after touching $US3,269.50, its strongest since he start of November.
Three-month LME copper rose 1.1% to close at $US6,833 a tonne, LME aluminium was up 1.3% to close at $US2,074.50 a tonne and LME nickel gained 1.6% to $11,290 a tonne but tin lost 0.7%t to $US19,455.
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.