Iron ore has continued its march back toward $US60 a tonne in offshore trade amid rising hopes for more stimulus out of Beijing.
At the end of the latest session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US59.20 a tonne, up 0.9 per cent from its prior close of $US58.70 a tonne.
The gains extend a withering run for the commodity that has come as a surprise to many, with a surge of over 25 per cent from its 10-year low of $US46.70 a tonne earlier this month. Much of this recovery has come in the past nine trading days, with iron ore last seeing a red session on April 15.
The developments have allowed for a strong bounce in stock prices within the iron ore sector, with BC Iron and Fortescue Metals leading the way.
The two WA-based miners endured a rare negative session yesterday during the current iron ore streak, with stock in both firms sinking around 5 per cent by the close as the broader market moved lower. Another lift in the commodity’s price overnight, however, leaves them primed to recover much of those losses during today’s trade.
Most analysts remain pessimistic about the ability of the current recovery to extend much further as a wave of new supply threatens to exacerbate an oversupply problem.
However, investors have been cheered by early signs of production cutbacks and a push to increase lending in China.
Reports have filtered through this week that China’s central bank will soon launch a credit-easing program similar to the long-term refinancing operations (LTROs) used by the European Central Bank.
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