Iron ore curve, technicals show rally nearing end: Clyde Russell
But behind these strong fundamentals is a technical picture showing the steel-making ingredient is heavily overbought and likely to decline in the next few months.
It's always tempting to dismiss technicals in the face of an opposing fundamental picture, but an analysis of the recent history of iron ore prices shows they have been accurate in reflecting turning points.
Asian spot iron ore has retreated slightly from a 15-month high of $158.50 a tonne hit on Jan. 8 and closed on Thursday at $158.20, having rebounded from a three-year low of $86.70 hit last September.
This has been driven by robust Chinese imports, which climbed above 70 million tonnes for the first time in December, as steel mills restocked on the back of a brighter economic outlook for the world's largest commodity buyer.
The solid demand outlook comes as Cyclone Narelle bears down on Western Australia, home to the bulk of mines operated by world number two and three producers Rio Tinto and BHP Billiton.
While the category four storm, the second-strongest type, will help keep prices buoyant in the short term as the market frets about supply disruptions, this will only serve to make iron ore appear more technically vulnerable.
Iron ore swaps in Singapore normally trade in a mild backwardation
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