LAUNCESTON, Australia, May 26 (Reuters) – Iron ore is continuing to defy the global economic gloom, with both futures in China and the spot price surging to the highest this year, showing how the steel-making ingredient is benefiting from a cocktail of supply concerns and demand hopes.
The Dalian Commodity Exchange’s most-active contract , for September delivery, ended at 723 yuan ($101.40) a tonne on May 22, up 25.2% since the start of the year in local currency terms.
The spot price for benchmark 62% iron ore delivered to China MT-IO-QIN62=ARG, as assessed by commodity price reporting agency Argus, ended at $97.30 a tonne on May 22, down slightly from the previous day’s close of $97.85, which was the highest price in eight months.
The spot price is up 6.7% since the end of last year, making iron ore a stand out performer among commodities, many of which have seen sharp drops in price as demand tanked after the spread of the novel coronavirus forced economies across the globe into lockdowns.
Iron ore’s relative outperformance shows the benefits of having bullish supply and demand stories, even if some holes can be poked in both narratives.