The iron ore price is again defying bearish consensus analyst forecasts and is instead charging back above US$100 per tonne.
The surprise move higher will certainly be welcomed by S&P/ASX 200 Index (ASX: XJO) mining stocks focused on digging up the steel-making metal, including Fortescue Ltd (ASX: FMG), BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO).
In late morning trade on Wednesday, Fortescue shares are up 1.35% at $18.75. And Rio Tinto shares are up 0.1% at $119.93.
BHP shares have yet to join in the mini-rally, down 0.37% at $40.01 apiece.
What's happening with the iron ore price?
Twelve months ago, the iron ore price stood at just over US$136 per tonne. By early April, that had fallen to US$100 per tonne, before sliding all the way to US$90 per tonne in September.
As you'd expect, this led to a sizeable retrace in the BHP share price, along with rivals Rio Tinto and Fortescue.
The industrial metal has faced pricing pressure on both the supply and demand side.
On the supply side, the ASX 200 miners along with Brazilian miners like Vale have broadly increased iron ore production over the past two years.
On the demand side, China – the world's top importer of the steel-making metal – has been struggling to rekindle its legendary economic growth engine. That's led to fears of lower demand from the nation's steel-hungry property and infrastructure sectors.
So, why did the iron ore price shake off the recent downtrend to post four consecutive days of gains and lift by 1.6% overnight to US$100.35 per tonne?
Well, it looks like forecasts of diminished Chinese steel demand weren't quite on the ball.
In fact, the latest data revealed that China's iron ore imports in 2024 reached record highs.
The nation's trade surplus also notched a new all-time high of US$992 billion in the year just past, with steel shipments hitting the highest level since 2015.
Commenting on the resilient iron ore price, ANZ Group Holdings Ltd (ASX: ANZ) analysts, including Soni Kumari said (quoted by Bloomberg):
China's recent stimulus measures boosted prospects for steel demand. Exports of some key commodities remained strong due to frontloading ahead of [incoming US president Donald] Trump's threatened import tariffs.
China's economy, and ASX 200 mining stocks, could face renewed headwinds in 2025 if incoming Trump follows through with his more stringent tariff proposals targeting Chinese imports into the US.
