LONDON, July 27 -- The spot price of iron ore delivered to China, the biggest buyer of the steelmaking ingredient, jumped the most in almost seven months as buyers from the Asian nation returned to the market.
The cost of 62 percent iron ore delivered to the port of Tianjin rose 5 percent to $133.40 a metric ton, the biggest one- day gain since Dec. 30, according to The Steel Index. The price hasn't posted a decline for nine consecutive days after posting 16 straight days of losses through July 13.
Chinese buyers had been absent from the spot market for almost a month and were shunning purchases amid speculation of lower prices, Goldman Sachs JBWere Pty analysts said in a report dated July 9. Vale SA, Rio Tinto Group and BHP Billiton Ltd. are the biggest exporters of iron ore, making up about two-thirds of seaborne supply. China is the world's biggest steel producer.
"The Chinese are back in the market buying," London-based ING Groep NV mining analyst Nick Hatch said today by phone. "They probably overstocked and there was a bit of a buying strike and obviously had a bit more domestic material coming on and as the price dropped back some of that domestic stuff is now being suspended again."
The spot price has risen 13 percent since July 15 after dropping to a 2010 low on July 13. It's unclear whether the gains can be attributed to fundamental buying or are driven by traders, ING's Hatch said.