Surging iron ore prices have kick-started the Australian economy’s exit from coronavirus lockdowns amid hopes the Chinese government could further stoke prices by unleashing stimulus spending at its annual congress meeting later this week.
A 13 per cent rally in iron ore prices since April 30 has pushed shares in Andrew Forrest’s Fortescue Metals Group to record highs. The rally appears to have further to run with futures prices more than 5 per cent higher in Monday’s trading session.
Strong Chinese demand for steel has coincided with weak iron ore supply from rival exporter Brazil, where the rapid spread of the coronavirus has added to the ongoing disruption caused by last year’s catastrophic Brumadinho dam collapse.
Brazil’s confirmed cases of the virus passed those of Spain and Italy at the weekend, making it the world’s fourth-largest outbreak after the US, Russia and Britain.
Those factors and the lack of virus transmission in Western Australia’s iron ore producing heartland has created bumper conditions for the nation’s most lucrative export industry, which is built upon the businesses of Rio Tinto, BHP, Fortescue and the companies linked to other AFR Rich Listers Gina Rinehart and Chris Ellison.
For the rest of this article: https://www.afr.com/companies/mining/china-pays-more-for-iron-ore-20200518-p54u1y