Analysts at Australia New Zealand (ANZ) Bank foresee continued strength in iron ore, Australia’s major export.
Iron ore prices rose to a six-year high of $125 per tonne earlier this week, taking the year-to-date gain to 34%. The rally has been driven by strong demand from China’s efforts to revive its pandemic-hit economy, as noted by Hellenic Shipping News.
Key quotes by ANZ
Part of the support has come from the real estate sector, where the activity is even stronger than before the crisis began.
Housing transactions have picked up strongly on the back of pent-up demand, particularly in China. This sector consumes about 40% of total steel consumption, and it also has important implications for downstream demand.
The bank expects iron ore prices to stay bid over the next 6 to 9 months.
A continued rally in iron ore prices could keep the AUD well supported on dips.
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