Dalian iron ore futures ripped to a new record and wrapped up their biggest weekly gain since February, raised by expectations of sustained tightness in supply and strong demand amid China's renewed drive to support its slowing economy.
The most-actively traded Dalian September iron ore contract jumped as much as 4% to 797.5 yuan/mt ($115.20), the highest since Dalian iron ore futures began trading in 2013, before ending +2.2% at 783.5 yuan, posting a weekly gain of 11.4%.
Some analysts see no end in sight to iron ore's rally that began shortly after Vale's (NYSE:VALE) tailings dam collapse in Brazil in late January.
"Supply losses in Brazil look structural, leaving the market undersupplied until 2020," ANZ analysts write. "Attractive steel margins amid stronger infrastructure spending in China bode well for demand."
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