Iron ore price surpasses $160 per ton... Overseas liquidity funds flock

Photo by Bloomberg

[Asia Economy Reporter Kim Bo-kyung] Iron ore prices have surged 70% since the beginning of the year, surpassing $160 per ton. Prices of non-ferrous metals such as copper, nickel, and zinc are also soaring.

According to the Ministry of Trade, Industry and Energy and Korea Resources Corporation on the 15th, the price of iron ore (Qingdao Port, China) recorded $160.13 per ton on the 13th. This is the highest level since February 20, 2013.

Iron ore prices were around $110 to $120 per ton last October but began rising in November, with the upward trend accelerating this month. The price has surged 70% compared to the beginning of the year and 28% compared to the previous month, breaking through $160 per ton.

While demand has increased due to large-scale economic stimulus measures by the Chinese government, inventories have decreased, and production in major exporting countries Australia and Brazil has sharply declined, driving prices up.

Recent cyclone warnings at the Pilbara Port in Australia, the world's largest iron ore export port, have also heightened supply and demand concerns.

Expectations for a global economic recovery have fueled speculative demand, contributing to market imbalances.

Not only iron ore but also non-ferrous metals such as copper, nickel, and zinc have seen prices surge as abundant liquidity from China and overseas flows into these markets.

Copper prices, which serve as a leading economic indicator, recently soared to the highest level in eight years, and with London Metal Exchange inventories declining for seven consecutive weeks, upward pressure has intensified.

A Korea Resources Corporation official said, "Non-ferrous metal prices are also rising due to the weak US dollar and expectations for the commercialization of COVID-19 vaccines."

As international iron ore prices continue their high-level rally, the domestic price of hot-rolled steel sheets reached 810,000 won per ton as of the 11th. This is an 80,000 won increase from 730,000 won at the end of July this year.

Hot-rolled steel sheets are thin steel plates made by heating and pressing slab-shaped steel semi-finished products, which are flat plates processed from molten iron. They are the most basic steel products mainly used in steel pipes and construction materials.

An industry insider said, "Global steel companies that cannot bear the cost burden due to soaring raw material prices such as iron ore are pushing for price increases," adding, "The domestic situation is no different, so price hikes are inevitable and are expected to be sequentially notified to the market."

This content was produced with the assistance of AI translation services.