Iron Ore’s Strong August Finish

The price for benchmark (62% grade) iron ore climbed 3.7% overnight, to $78.91 a tonne. That’s its biggest gain for the month.

It’s all thanks to some positive data coming out of China’s steel industry. A Purchasing Managers Index (PMI) report suggests that activity is booming. The index reported a 57.2 rating — the highest level seen in 16 months. Which is up from July’s reading of 54.9.

China, it seems, still has plenty of growth left to offer. At least for the time being.

It’s good news for iron ore producers though, as the commodity continues to rally from its June lows. However, whether or not the price can climb all the way back up to its February heights is another question altogether.

Iron ore wasn’t the only strong performer. A range of other commodities have had strong performances over the August period. Here is the latest snapshot:

Gold price: $1665.32, +0.20%

Zinc price: $3952.01, +1.76%

Copper price: $8541, +0.29%

Alumina price: $542.5, +4.6%

 Gold mixed as tensions flare

The price of gold has continued to fluctuate with two opposing market forces vying for control.

An emboldened North Korea is scaring markets, and saw investors flock to gold earlier in the week. It seemed as if gold was set for a resurgence with increased interest, but it didn’t stay that way for long.

US GDP growth data was released on Wednesday, upping second quarter predictions to 3%, as consumer spending buoyed the result. This improvement in the US economy saw investors turn their back on the precious metal, lowering the price.

It seems gold is still stuck in a state of flux, much like the wider markets.

Zinc price hits decade high

On 16 August, zinc climbed over the US$3000-per-tonne (AU$3773) barrier, as it continues to climb higher.

Once again, China is fuelling demand as supply concerns continue to grow. Analysts remain optimistic about zinc prices in 2017, though they may grow at a slower rate than some have predicted. Nonetheless the supply deficit looks set to continue for some time according to industry experts.

Copper continues to climb

Copper raked up a 6.6% price gain for the month of August, remaining at its three-year-high level. The PMI report from China isn’t just helping iron ore, it seems, as Chinese markets gobble up copper supplies as well.

Though analysts are cautious that weaker growth from China in the back-end of the year could suppress current growth.

Alumina rises amid tightening Chinese supply

China’s domestic suppliers of alumina, are trying to inflate the price. A combination of lower supply from the southern suppliers, and restricted sales from northern suppliers is being blamed for the situation.

The market remains bullish though, and Chinese buyers may start turning to international suppliers, if need be. Which means Australian miners could be set to capitalise if market conditions align.

Regards,

Ryan Clarkson-Ledward
Junior Analyst, Markets & Money

 


Ryan Clarkson-Ledward is a junior analyst for Markets & Money. Ryan has degrees in both communication and international business. His priority is bringing you the latest price updates on stocks through ASX updates, as well as supporting Sam Volkering with background research. As part of the team at Markets & Money his aim is to provide unbiased and relevant news for readers. Ryan’s work with Sam is designed to provide research that complements Sam’s analysis for small-cap and technology stocks. Together, their objective is to break through all the jargon and give you the hard facts to inform your investment decision-making. Ryan writes for:


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