Iron ore price soars to $226... All-time high

Photo by SCMP

[Asia Economy Reporter Yujin Cho] Bloomberg reported on the 10th (local time) that iron ore prices soared to an all-time high amid expectations of economic recovery.

According to the report, iron ore futures prices on the Singapore Exchange (SGX) surged more than 10% after the market opened that day, reaching an all-time high of $226 per ton. Iron ore prices continued their sharp rise due to strong demand from major Chinese buyers, surpassing $200 per ton for the first time last week.

Vivek Deh, a commodities analyst at the Reserve Bank of Australia, said in an interview with Bloomberg TV, "Supply still cannot keep up with strong demand."

Along with iron ore, copper also continued its record rally, soaring to $10,500 per ton in trading that day.

Major foreign media outlets evaluated that expectations for COVID-19 vaccines, additional U.S. economic stimulus measures, and global economic recovery are leading to investments in industrial commodities. Additionally, concerns over U.S. inflation and a weak dollar have converged, concentrating capital flows, so iron ore prices are expected to maintain a strong trend for the time being.

The Hong Kong South China Morning Post (SCMP) analyzed that the escalating trade tensions between China and Australia, including China's announcement to indefinitely suspend all activities with Australia amid strained strategic economic dialogues, also influenced the sharp price surge.

China sources 60% of its total iron ore demand from Australia. The China Iron and Steel Association (CISA), representing China's state-owned steel industry, recently expressed concern over the rapid price increase and requested the government to correct and improve market malfunctions.