The ASX will get a small boost today from another sharp rise in iron ore prices on Friday to new seven-year highs above $US160 an ounce.
Fears of supply disruptions caused by a tropical low at Port Hedland helped drive the rises on Thursday and Friday.
But the low has gone and Port Hedland is now back and has restarted loading at its various ports.
Tonnage lost was minimal, which might see any immediate price rise capped today.
The price of 62% Fe fines rose $US3.55 or 2.4% to $US160.13 a tonne, delivered to northern China.
That helped the price over the week end up 10.4%.
The price so far in December is up 21.65% and looks very much in a boom and that will, if past history is any guide, end in tears and a big slide.
Friday’s jump followed the 4.2% jump on Thursday which in turn saw the share prices of Rio Tinto, Fortescue Metals, and BHP hit all-time or multi-year lows (in the case of BHP).
BHP shares rose 0.8% on Friday to $US42.82 with a day’s high of $43.30. That’s the highest the shares have been since early 2011 in the wake of the great iron ore and coal boom more than a decade ago. BHP shares rose 3.2% over the week and are up 10% year to date.
Rio shares closed up 0.5% at $116 on Friday, a gain of 2.4% for the week and a gain of 15.5% so far in 2020. Rio’s shares ended at an all-time high on Friday after touching an intraday high of $117.12.
Fortescue Metals shares were up 1.95% on Friday at $22.95, a new all-time closing high after an intraday high of $23.27. They rose 11.35% last week and are up 114% for the year so far.
The sharp rise in iron ore prices has triggered a moan from China’s steel industry.
A group of Chinese steel producers on Friday called on the country’s market regulator and securities regulator to investigate the recent spike in iron ore prices, according to Reuters.
That’s a familiar whine from CISA when iron ore prices rise sharply. They never repeat the call when prices fall sharply.
“Current surging iron ore prices have deviated from the supply and demand fundamentals, largely exceeded mills’ expectations and there’s obvious signs of capital speculation,” the China Iron and Steel Association (CISA) said in a statement, citing major steel producers at a symposium on Thursday afternoon.
Reuters said steel firms which attended the symposium included China Baowu Steel Group, Shagang Group, Beijing Shougang, HBIS, Valin Steel and Jianlong Steel.
“Losses in the steel sector are expected to widen. It’s not good for the stability of industry chain and supply chain and will seriously weaken Chinese manufacturing’s international competitiveness,” said the CISA, Reuters reported.
