The steelmaking ingredient has staged a surprise two-week rally after nearing US$100 a tonne earlier this month, but market pundits think the gains may be shortlived.
A two-week rally in the price of iron ore may prove shortlived, with some analysts predicting the Australia’s key export commodity will fall back to $US100 a tonne before the end of the year.Iron ore shipments at the docks in Putian, in China’s Fujian province.The gains were further spurred on Friday, when China’s policymakers announced a suit of measures to ease mortgage rules and lift the nation’s struggling property sector. The industry accounts for about 40 per cent of China’s steel demand.
ANZ senior commodity analyst Daniel Hynes said he was a little surprised by the two-week rally given the market fundamentals at play. “The steel demand that we calculate from the housing market remains particularly weak,” the analyst said. “The new start and construction activity in the sector is at levels we haven’t seen for several years and is not looking like it will improve anytime soon.”Mr Hynes also said he was watching China’s struggling property developers for any sign of recovery.
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