The price of 62% Fe grade iron ore fines from Australia to China increased by US$0.15 yesterday (December 4), reaching US$106.65, a new high since October 8. The price has risen by US$1.6 so far this month, an increase of 1.5%.

China’s ferrous metal futures and spot steel prices weakened, with fewer transactions, but the market had expectations for macroeconomic policies in December. Besides, the freight rate of iron ore from Australia and Brazil to China has dropped, reducing steel mills’ import costs, giving impetus to the demand for iron ore and pushing the price to continue to rise.

The gradual expansion of winter storage also supported iron ore prices. Although the iron ore supply was loose, falling freight rates increased steel mill profits, and there was limited room for a decline in hot metal production. There will be little downward pressure on iron ore prices in the short term.