What is causing this iron ore rally?
Dalian iron ore has had a somewhat bullish trend since 2017, with China accounting for about 80% of total imports since 2012. However, iron ore prices had dropped sharply last year, following China dealing with a resurgence of COVID-19 cases. This led the metal’s prices to drop about 60% from an all-time high of around $217 (CNH 1470) per tonne, to approximately $90 per tonne (CNH 609).
However, Dalian iron ore soon bounced back to the current $136 (CNH 920) per tonne levels, at the time of writing, buoyed primarily by China reopening its economy and industry. Fitch Ratings has recently given China an A+ rating, with a stable outlook as well.
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