by Chris Becker
The iron ore complex took a bit of a breather yesterday as spot prices were unchanged while Dalian futures pulled back, rebar continues to rise as demand for steel in China reaches new highs:
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Meanwhile its a continued boon for Australia with iron ore exports underpinning the post-COVID recovery, and in fact “carrying” WA along:
Federal Resources Minister Keith Pitt said Australia was expected to hit a new high of $136 billion of iron ore exports in 2020-21.
“Iron ore is a big part of the resources sector that is forecast to contribute $296 billion in export earnings this year,” he said. “In Western Australia, it is carrying the state’s economy through the coronavirus pandemic, providing approximately a quarter of the state government’s revenue.”
According to federal Treasury estimates, a sustained $US10 rise in iron ore prices corresponds to an extra $4.4 billion rise in nominal GDP and $300 million in extra company tax receipts.
All too easy for the big iron ore players like Twiggy’s FMG, now on track for its best year ever:
The company shipped 42.3 million tonnes of iron ore in the third quarter alone.
Fortescue CEO Elizabeth Gaines told Brooke Corte the strength of iron ore prices is underpinning their success.
“Given what we’ve seen for the first nine months, there’s nothing to indicate that we won’t produce an outstanding year.”
The share price is quickly catching up too: