Iron ore and base metals surge on Donald Trump’s win – by Tess Ingram and James Thomson (The Australian Financial Review – November 10, 2016)

The iron ore price has “done a Donald Trump”.

Underestimated since the beginning of the year, iron ore has recorded a gradual but striking comeback capped by the Chinese spot price jumping 3.9 per cent on Wednesday to $US70.98, its highest since January 2015. Iron ore has now risen 85 per cent since touching a low of $US38.30 last December.

Prime Value Asset Management joint chief investment officer S.T. Wong said the surge, and the resultant uptick in mining stocks, reflected a “rush of adrenalin” being pumped into the market after the outcome of the US election on Wednesday.

“The market is really reading into the potential for Trump to come up with a policy to drive the US towards a more fiscally driven perspective as opposed to monetary push we have seen over the past five or 10 years, and that is driving the commodity complex and trickling down to the mining equities and industrial equities space,” Mr Wong said.

Whether it endures, according to Mr Wong, will depend on how those policies transpire. The iron ore price surge sparked big jumps in the shares of diversified miners Rio Tinto and BHP Billiton, which were both up 8.2 per cent to $58.13 and $24.42 per share respectively.

Iron ore miner Fortescue Metals Group leaped 10.7 per cent to $6.01 per share, its highest since March 2012.

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