Beware of iron ore’s spike above $US100 – producers don’t look cheery

Those hoping that the iron ore price climbing back above $US100 a tonne is a positive sign of things to come should think again, as miners brace for a fresh round of cuts to steel production in China and an imminent wave of new supply from Rio Tinto’s huge African project.

This week, iron ore broke above the key level for the first time in more than a month in Singapore, buoyed by easing trade tensions between Washington and Beijing, and fresh stimulus from China’s central bank. On Wednesday, prices jumped about 2 per cent to above $US101 a tonne, a six-week high.

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