Spot iron ore prices are fast approaching $100 a tonne, well above the levels at which miners and steelmakers in Japan, South Korea and Europe have struck supply deals, as demand outside China recovers.
The surge in spot prices has spurred several banks to forecast that benchmark - annually negotiated - prices will rise next year, reversing their previous expectations of a fall in prices. "The market is going up, up and up," said one London-based iron ore broker.
Spot ore prices in China rose this week to $93 a tonne - including freight - and industry observers said the market could hit a year high above $100 a tonne in the near term. The surge is a remarkable rebound from April's low of $58 a tonne.
The producers of ore are Vale do Brazil, Rio Tinto and BHP Billiton.
Now is this the effect of restocking or of a pick-up of demand?
China announced that in June 49.42 million tonnes of steel were produced – an all-time monthly high. We hope this figure is reliable.
The current spot price is almost 15 per cent above the level at which annual benchmark deals have been struck between global miners and big steelmakers outside China. Those agreements cut benchmark prices for the 2009-10 year by about 33 per cent from the 2008-09 level.
Chinese steelmakers and miners remain deadlocked about a benchmark deal for 2009-10.
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The surge in spot prices has spurred several banks to forecast that benchmark - annually negotiated - prices will rise next year, reversing their previous expectations of a fall in prices. "The market is going up, up and up," said one London-based iron ore broker.
Spot ore prices in China rose this week to $93 a tonne - including freight - and industry observers said the market could hit a year high above $100 a tonne in the near term. The surge is a remarkable rebound from April's low of $58 a tonne.
The producers of ore are Vale do Brazil, Rio Tinto and BHP Billiton.
Now is this the effect of restocking or of a pick-up of demand?
China announced that in June 49.42 million tonnes of steel were produced – an all-time monthly high. We hope this figure is reliable.
The current spot price is almost 15 per cent above the level at which annual benchmark deals have been struck between global miners and big steelmakers outside China. Those agreements cut benchmark prices for the 2009-10 year by about 33 per cent from the 2008-09 level.
Chinese steelmakers and miners remain deadlocked about a benchmark deal for 2009-10.
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