Iron Ore

Market comment on Iron Ore:

Iron ore prices have remained strong despite market predictions to the contrary – see below for benchmark for China imports at 58% Fe product...

We recall that iron ore prices proved to be a lagging indicator at the time of the first phase of the global financial crisis in 2008 and recognise that investors might be worried about a repeat performance this time – after all, iron ore is the only industrial mineral or metal still to be showing higher prices than at the beginning of this year. But a key point to remember is that in 2008 the majority of iron ore was traded on contract and inventories at mills in China were at all-time highs. The dominance of contract pricing at that time meant the posted price was not as reliable an indicator of the underlying market as it is now with the majority of sales at spot or something similar.

Source: Mirabaud Securities