Shares of ArcelorMittal South Africa jump almost 5 percent as a turnaround in Chinese demand bolsters iron ore and steel prices, a trader says.
A steep drop in steel inventories held by Chinese traders may trigger a stronger price recovery than usual at the start of next year as they rush to restock.
“After a bad year, ArcelorMittal is also benefitting from the increased certainty of a renewed iron ore supply agreement with Kumba Iron Ore's Sishen mine,” says Kevin Algeo, a trader at Johannesburg-based Imara SP Reid.
Kumba will supply the local unit of ArcelorMittal with up to 4.8 million tonnes of ore at $65 per tonne next year as the companies try to resolve a pricing dispute.
The interim deal will be valid until the end of December 2013 or until a legal process between the two parties is concluded, whichever is sooner. - Reuters