Iron ore futures soared as trading resumed on Monday, setting a record amid widespread demand for China and widespread rise in commodity prices as the global economy recovers.
The future in Singapore rose more than 10% to a new record of $ 226 a tonne. The raw material for making steel is increasing as there is a strong demand from China for more buyers. Prices crossed $ 200 for the first time last week alone.
“The sector is very hot, and the biggest question of 2021 is when China’s steel demand will ease the momentum,” said Vivek Thar, commodity analyst at Commonwealth Bank Australia (OTC: CMWAY) in a Bloomberg TV interview. “Distribution has not yet been able to meet that strong demand.”
Iron ore is one of the most advanced materials in recent months, from copper to crops. The price of Bloomberg’s spot goods ended last week at almost a decade’s high. Copper extended its record rally on Monday, rising to $ 10,500 a tonne in early trade.
Steel prices in China have risen as heavy users, such as the construction and manufacturing sectors, have been enjoying busy times and enjoying tailwinds from stimulus measures. Steelmakers in other parts of the world, such as ArcelorMittal (NYSE: MD) SA, are also seeing a boom as markets recover from the epidemic.
“The demand for ex-China is likely to come back to the extent that we see an increase in global steel demand, and iron ore demand will remain at these high levels,” said CBA’s Thar.