ASX miners surge as new China tariffs boost iron ore prices
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The news: Iron ore miners rallied for the second successive session on the ASX as iron ore prices were boosted by China's retaliatory tariff on imports of US coking coal.
The numbers: Champion Iron (6.6%), Fortescue (3.4%), Rio Tinto (1.6%) and BHP (1.5%) were all trading higher by 11:15am AEDT. Materials, up 1.6%, was the second best performing sector as the ASX 200 index added 0.6%.
Iron ore futures were up 0.5% at USD104.85 in Singapore.
The context: China announced a slew of new duties and measures to be placed on the US overnight, in response to the Trump administration's 10% tariffs on Chinese imports. Among them was a 15% tariff on imports of US coking coal, a complementary input to iron ore for steel production.
Whitehaven Coal, which owns large coking coal mines Blackwater and Daunia, was up 5.82%.
Meanwhile, iron ore prices look set to gain from tropical cyclone damage in Western Australia's Pilbara region, Bloomberg reported.
Rio Tinto said that high swells and wave conditions caused by Tropical Cyclone Taliah and Tropical Cyclone Vince posed risks to the ports of Cape Lambert and Dampier.
Analytics firm Wood Mackenzie expects the supply disruptions in Australia, combined with an uptick in demand in China following the end of the Lunar New Year holiday, could support global iron ore prices.
The rally extended gains from Tuesday, after the US agreed to delay its proposed new 25% tariffs on Mexico and Canada for 30 days.
The sources: Bloomberg, ANZ research
