The price of iron has fallen by 10% in the hope of achieving a global economic recovery

Iron ore prices rose more than 10 percent in Asian trade on Monday as the economic recovery from the Covid-19 pandemic spread beyond China and the buoy of markets around the world spread due to higher expectations.

Future prices of Singapore’s iron ore rose more than $ 226 a tonne, a record dollar. In Dalian, China’s main commodity trading center, the price of the most active contract in the future also rose 10 percent.

The price increase had a follow-up the race for the last highs for the steel component, along with other raw materials, there has been strong demand from the rapidly recovering Chinese economy and is expected to benefit from government support measures around the world.

“It simply came to our notice then. . . it’s the full force of the global steel recovery, ”said Justin Smirk, Westpac’s chief economist.“ I think the reality is that the market is still very tight, we still have very, very hard steel prices. ”

In China, steel production fell 19 percent in March, despite Beijing’s efforts play as the government strives to meet environmental goals.

Chinese imports have risen behind the hunger for raw materials, along with the jump in exports. According to data released on Friday, imports grew by 43% year-on-year in April, even though last year’s low-level pandemic affected world trade.

The strong recovery The Chinese economy, which returned to pre-pandemic growth rates at the end of last year, lost some strength in the first quarter. Imports of iron ore fell in April compared to March.

Trade exports of iron ore from Australia to China have been studied as a result of geopolitical tensions caused tariffs in shipments such as barley, cow, and wine.

Michael Lovecchio at StoneX brokerage thought that the jump in the price of iron could be attributed to underlying market demand, “worsening Chinese / Australian tensions” or “Chinese retail speculation”.

Commodity prices in China have risen producer prices this year, with data released on Tuesday is expected to show a jump more than 6 percent. China has had a negative PPI since the outbreak of the pandemic last year until early 2021.

Warren Patterson, head of ING’s commodity strategy, suggested that inflation forecasts boosted commodity demand for investors.

Iron “is a real asset, so it’s a good hedge for inflation… I think that’s why we see a lot of investors’ money going into commodities, ”he said.

“I certainly think the price action is moving away from the real basics,” he added.