According to The Australian Financial Review, the spot price for iron ore has extended its stunning year-to-date rebound, topping $US80 a tonne.
Iron ore for delivery to China's Qingdao port climbed 1.5 per cent, or $US1.22, to $US80.83 at its latest fix, according to Metal Bulletin. That's the first time it has traded above $US80 since October 2014. The price has risen 26 per cent this month and has risen 82 per cent so far this calendar year.
The latest advance came as China's State Council pressed ahead with its environmental probe into illegal capacity expansion at mills in Jiangsu and Hebei provinces, Metal Bulletin said.
Earlier on Monday, Chinese steel futures jumped more than 6 per cent to the highest in 31 months, as investors raised bets that strong property and infrastructure investment will sustain demand in the world's top consumer, spurring a similar rally in iron ore and zinc.
Strong property sales in China along with the government's push for more infrastructure projects via its public-private partnership (PPP) fund have strengthened steel demand while supply is under control as Beijing intensely pursues capacity cuts, said Daniel Meng, analyst at CLSA in Hong Kong.
"In the first half of 2017, we will continue to have very strong steel prices because property sales remain very strong at least till October and PPP programme is still in early stage and supply side should remain controlled," said Meng.
Construction steel product rebar on the Shanghai Futures Exchange rose as much as 6.4 per cent to 3238 yuan ($US469) a tonne, its loftiest since May 2014. Rebar closed up 4.7 per cent at 3188 yuan, gaining nearly 90 per cent this year to end a six-year slide.
China's real estate investment growth quickened in October to its highest since April 2014. The country's many infrastructure projects include a 247 billion yuan railway plan between Beijing, Tianjin, and Hebei, to integrate the three areas into a mega-city.
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