The boom in Metals Drives Iron Ore Prices to Go Ballistic

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As the pandemic slowly and steadily comes under control globally, the investors/traders are now looking at a growing economy. The majority of the economic analysts and investors are now hoping to see the economy grow soon. So far, the situation seems to be going in favor of the analysts and investors.

With the global economy coming back to the old glory it had before 2020, a new frenzy is being observed all over the world. According to the latest market observations, the investors are rallying towards the trades of metals. The data shows that the number of investors coming up to purchase metals has experienced a tremendous surge.

According to China, its benchmark for the iron ore futures was exceeded by a huge 10% figure on Monday, May 11, 2021. This means that 10% more investors and investments than the benchmark have been experienced by the Chines iron ore markets.

The ING’s head of commodities strategy, Warren Patterson has also talked about the growth rate, in demand for iron ores in the Chinese market. He stated that the growth rate in Chinese markets for Iron ore is constantly rising.

He stated that according to their findings and market observation, the demand for Iron ores is global. Patterson stated that they are observing the same kind of situation all over the world. As the demand for iron ores soars throughout the globe, it would eventually put a strain on the supply of iron.

So far, the iron ore’s market growth is optimistic, which means that more investors would continue rallying towards the commodity. Once the supply for iron ores becomes strained, the price of the commodity would be moving higher. As per their calculations, it is easily predictable that the price for the commodity would soon experience a great surge.

On the other hand, China is trying its best to make the most out of the current market trend. In China, factories are incentivized if they demonstrate a significant increase in their steel production. So far, the increase in steel production in China is evident, which means that the Chinese market is using more iron ore in the process.

However, China is currently facing yet another problem in terms of the supply of iron ore. Before 2020, China was mainly importing its iron ore from Australia. However, tensions have grown between both countries during the pandemic and have impacted trade relations.

The commodity markets show that not just the iron ore is currently booming as a metal, but it is the entire metals market. On Monday, the commodity market observed “Silver” hitting an all-time high in terms of price and demand.

However, the prices of steel are telling a completely different story as its current price is triple the size of average steel prices observed in the past 20 years.