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Iron ore jumps to two-year high, but analyst warns rally is overdone

Published 11/11/2016, 10:30 AM
Iron ore jumps to two-year high, but analyst warns rally is overdone
BHP
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CLF
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HG
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VALE
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GLEN
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RIO
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GLNCY
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  • The price of iron ore jumps 7.4% to $79.70/metric ton, marking its highest level since October 2014, on expectations of better than expected demand in the U.S. and China as well a slower than expected iron ore supply growth in recent months.
  • Iron ore prices have surged 18% since the Trump election victory; other commodities such as copper also have rallied due to expectations that Trump will aim to fulfill his promise of spending more on U.S. infrastructure.
  • But the rise may be overdone, according to Capital Economics Ltd., which expects iron ore to face growing pressure on rising supply from Australia and Brazil as well as headwinds to demand in China.
  • Relevant tickers include BHP, RIO, VALE, CLF, OTCPK:AAUKF, OTCPK:AAUKY, OTCPK:GLCNF, OTCPK:GLNCY.

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