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He iron ore price reached an all-time high on Monday in the latest sign of booming commodity markets, which have fallen in recent weeks as large economies recover from the pandemic.
The steel ingredient, a major source of revenue for the mining industry, rose 8.5% to a record high of nearly $ 230 a tonne fed by strong demand from China where the mills have begun production.
Other commodities also rose sharply, including copper, which hit a record high of $ 10,747 a tonne before stopping gains. The increases are part of a broad rise in the cost of commodities that has lasted more than a year and wants to talk about another supercycle, a prolonged period where prices remain significantly above their long-term trend time limit.
He price of wood it has also reached an all-time high as U.S. sawmills struggle to keep pace with demand in the run-up to the high summer housing season.
“Commodity demand signals are firing at all cylinders amid a synchronized recovery at global economic power plants,” said Bart Melek, head of commodity strategy at TD Securities.
Strong demand from China, the world’s largest consumer of commodities, international spending on post-pandemic recovery programs, supply disruptions and large bets on the green energy transition explain rising commodity prices.
Commodities have also been driven by a weaker U.S. dollar and investors ’moves to stock up on assets that can act as hedging against inflation.
The S&P GSCI spot index, which tracks price movements in 24 commodities, has risen 26% this year.
Strong investor demand pushed fund managers ’core assets to a new record $ 648 billion in April, according to Citigroup. The bank noted that all sectors increased monthly with agriculture and precious metals at the forefront.
Agricultural commodities have been particularly strong due to rising Chinese demand and drought concerns in Brazil. Drought in the US, where it is being planted this year, also adds to the upward rise in prices. Corn, which is trading at $ 7.60 per boxwood and soybeans at $ 16.22, is at levels not seen since 2013.
“From a macroeconomic environment to strong demand and production concerns, the ingredients are available for the supercycle,” said Dave Whitcomb, commodity specialist Peak Trading Research.
Rising copper and iron ore prices are a big help for large miners, who are in the process of recording incomes that will surpass the records set during the boom of the early 2000s driven by China.
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JPMorgan estimates that Rio Tinto and BHP will be the ones to pay the most corporate dividends in Europe this year, paying nearly $ 40 billion to shareholders. Shares in Rio, the world’s largest producer of iron ore, hit a record high of £ 67 on Monday.
Brent crude, the international benchmark for oil, has run again
about $ 70 a barrel, which surpassed in March for the first time in 2010
more than a year, reclaiming lost ground as a pandemic
reduced demand for crude and crude markets.
Supply cuts by major oil producers have helped strengthen the market
as consumption has begun to recover worldwide.
While some Wall Street banks have celebrated the start of a new supercycle, with some traders talking about a return of $ 100 per barrel of oil, others are not so convinced. The International Energy Agency said oil supplies remain plentiful, meaning any talks on a supercycle are premature.
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