Iron ore price holds firm at six-week high

The iron ore price has held firm at $US58.40 a tonne, as its winning run extends to 10 straight sessions without a fall.

A conveyor belts loads up a barge at an iron-ore transfer and storage centre operated by the Shanghai International Port Group in Shanghai. (Photographer: Qilai Shen/Bloomberg)

The iron ore price is managing to hold at its highest point in more than six weeks as it continues a two-week rally amid lacklustre shipments from Australia’s biggest producers.

Iron ore settled at $US58.40 a tonne in the most recent session, according to The Steel Index, unchanged from the previous day. The price has either risen or held steady for 10 straight sessions.

Macquarie analysts have attributed the surprising strength to disappointing exports from Australia and Brazil. The commodity had earlier been cooling from levels above $US60, but if current strength continues iron ore could be set to test the $US60 threshold again.

Rio Tinto reported a fall in iron ore shipments in the September quarter last week, while BHP Billiton’s output was flat. In London trade, BHP rose 0.4 per cent, while Rio gained 1.9 per cent.

But pure-play iron ore producer Fortescue shipped more ore, saying iron ore and steel markets “continued to be supported” by Chinese infrastructure and housing activity during the quarter.

Deutsche Bank analysts said the contrast between the miners’ results could offer an opportunity for Fortescue.

“With the three global iron ore majors stuttering on new supply, we expect FMG to make the most of this market opportunity,” Deutsche said in a research note.

“Spot prices are up strongly and FMG has solid leverage.”

If spot iron ore prices hold at current levels until the end of fiscal 2017, Fortescue’s earnings could be 30 per cent higher than expected and net debt could fall to $US2.8 billion, from $US4.2bn currently, the bank said.