Iron ore price takes off as China lifts production

SYDNEY: The cash price of iron ore delivered to China jumped to at least a 13-month high amid rising demand from steelmakers.

The cost of 62 per cent iron-content ore delivered to Tianjin port increased 4.3 per cent, the ninth day of gain, to US$130.1 a tonne yesterday, according to The Steel Index.

The spot price has posted six weekly gains, rising 31 per cent.

Steelmakers in China, the biggest maker of the alloy used in cars and construction, are increasing purchases as the nation's spending stimulus spurs demand. BHP Billiton, Rio Tinto Group and Vale are the world's three-biggest exporters of iron ore.

The cash price, which has doubled from a 2009 low in March, is trading at about a 62 per cent premium to contract prices, JPMorgan Cazenove said, boosting expectations for a gain in benchmark contracts.

The cash price is the highest on record on the Steel Index data compiled by Bloomberg since December 2008.

- BLOOMBERG