Improving fortunes in China boost iron ore

What's Up: Iron ore climbed to the highest in more than three months as signs of an economic pickup in China, the biggest buyer, boosted demand.

Workers shovel iron ore from Australia while it is being offloaded at Rizhao Port, one of China's biggest ports for importing the commodity. REUTERS

Iron ore climbed to the highest in more than three months as signs of an economic pickup in China, the biggest buyer, boosted demand.

Ore with 62 per cent content delivered to the Chinese port of Tianjin gained 0.6 per cent to US$122.10 a dry tonne on Friday, the highest since July 24, according to data compiled by The Steel Index.

Prices climbed 14.5 per cent last month, trimming this year's loss to 12 per cent.

China's total exports rose at the fastest pace in five months in October, adding to signs of a rebound in the world's second-biggest economy after industrial output, fixed-asset investment and retail sales accelerated.

Economic growth will accelerate 7.7 per cent this quarter from 7.4 per cent in the three months to September 30, the weakest since the first quarter of 2009, according to the median estimate of 31 economists in a survey compiled by Bloomberg.

"The activity data all implied that growth is rebounding in China," said Natalie Rampono, an analyst at ANZ Banking Group.

"There was so much downside to prices so that's perhaps why we've seen such a sharp rise. Now that China's looking to recover a little bit, iron ore prices will continue to be supported."

Overseas shipments increased 11.6 per cent from a year earlier, the Beijing-based Customs General Administration said on Saturday.

While the country's iron ore imports fell to 56.43 million tonnes last month from 65.01 million tonnes in September, purchases were 13 per cent higher from a year earlier, according to Bloomberg calculations.

For the first 10 months of this year, Chinese iron ore imports gained 8.9 per cent to 607 million tonnes from the same period a year ago, customs data showed.

Steel-product exports by China were 4.84 million tonnes last month, 27 per cent higher than a year earlier, according to the data.

"The Golden Week holiday might have affected construction progress in October, which should ramp up in the November peak season," Morgan Stanley said in a report. Spending on infrastructure was gradually kicking in, it said.