China has taken swift action in a bid to slow iron’s astronomical price rises as the rally shows little sign of slowing down.

On Monday, the Eastern superpower sought to raise the limits on trading and margin requirements, and reinstated fees on steel futures hoping to slow the metal’s rally.

The moves follow significant movements in commodity prices. Copper prices hit a 10-year high last week as economic indicators pointed to recovery in major global economies.

Meanwhile, iron prices broke new ground to begin trading at a record $201.88 a tonne after the metal was spared from further import sanctions imposed by China on Australian goods.

A growing chorus of analysts are now suggesting these gains could be the beginning of a commodities ‘supercycle’.

Speaking to Financial Times, Benchmark Mineral Intelligence managing director Simon Moores said miners are in prime position to capitalise on these trends.

“You have an EV supercycle and you add a real commodity supercycle on top of that — it’s game on for the miners,” he said.

Carpentaria Resources 

In response to the currently buoyant iron market, local miner Carpentaria Resources is moving towards production with a renewed fervor.

The company’s Hawson’s Iron Project contains an uncommon soft ore body, which contains the world’s highest iron ore grade at 70%.

The company has recently considered legal action against its joint venture partner Pure Metals after the latter failed to uphold its end of an agreement that should have seen Carpentaria increase its holding of the project to 94%.

These control or delay challenges have slowed the advancement of the project, which Carpentaria chair Bryan Granzien said has weighed on the company’s share price. 

Mr Granzien noted shares in the business have traded flat since 2019 despite the tremendous gains in iron prices.  That gap is even wider as the iron prices have soared in recent months.

Source: Carpentaria Resources Investor Presentation

“The market lost a bit of hope, I guess, back in 2019,” he told guests of Reach Markets’ fortnightly The Insider: Meet the CEO webcast. 

 

“We’d love to reconnect the dots there”.

Mr Granzien said he hopes the Pure Metals blockage will be resolved quickly, and allow Carpentaria to progress its work at Hawson’s on an accelerated schedule.

This article summarises some of the information Mr Granzien shared with us during the session. You can watch a full recording below, or you can click here to book into our next session.

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Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets position. Any advice contained within this presentation is general advice and does not consider your personal circumstance, you should consider whether it’s appropriate for you. 

The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.

Past performance is not a reliable indicator of future performance.

Sources:

• Global Mining: China moves to cool rally as iron ore prices explode
• Global Mining: Iron ore price tops $200 amid further deterioration of China-Australia relations
• Reuters: Australia shares flat as losses in banks, tech stocks offset miners’ gains
• Financial Times: Broad commodities price boom amplifies ‘supercycle’ talk
• The Market Herald: Carpentaria Resources (ASX:CAP) gears up for capital raise while legal battle against JV partner looms