From Rupert’s iron ore flunkies:
The key export has now been holding above the $US55 threshold for six weeks, after jumping to $US55.90 on July 4, defying the many bears calling for the commodity price to slide over the rest of this year.
The May Federal Budget estimated that iron ore would average $US55 a tonne over the course of the following year, a forecast which was widely seen as too optimistic. Any slide in the price has the potential to put a dent in government tax revenues, so the recent strength will offer some welcome relief in Canberra.
The Budget uses the FOB price which is ex-shipping. The spot price reported by The Australian is CFR which includes shipping cost (an average of $5 per tonne). In spot terms therefore the Budget forecast price was $60 and it has not fared well at all:
