Iron ore jumps 4pc boosting big miners

Iron ore snaps a three-day losing streak, as Macquarie points to flat export volumes despite the recent run up in prices.

The iron ore price has bounced as port data showed exports were not increasing even though the price has been on an improving trend over the past few months.

Iron ore jumped 4 per cent to $US62.90 overnight, snapping a three-day losing streak.

The price rise boosted the Australian mining giants. In London trade, BHP Billiton added 2.1 per cent, while Rio Tinto jumped 4.3 per cent.

Exports from Australia and Brazil are not yet picking up despite the recent strength in prices, Macquarie analysts said in a note.

“The latest three-week moving average of Australian shipments indicates an export run rate flat from 2015 as a whole, with BHP the big laggard,” Macquarie said.

“Meanwhile Brazilian exports are running at broadly the same rate as they were in February and March, which is 7 per cent below average 2015 run rates, primarily due to the Samarco shutdown.”

The commodity price has been surprisingly strong over the past couple of months amid restocking by Chinese steel mills and a rush of speculative trading, which China’s exchanges recently moved to curb, although it remains depressed compared to its 2011 peak of around $US180 a tonne.

But Macquarie warned of more pain ahead, saying steel production expectations are starting to peak and demand to buy extra ore has waned.

The bank repeated its forecast of a $US50 per tonne price for the full year and a near-term return to a level that would not incentivise extra Chinese domestic ore production.