Commodity Prices Gain During Quarter One With Iron Ore Leading

Commodity prices have finally posted gains in the first quarter of 2016. The overall commodity sector consisting of 29 of the major commodities that trade on US and UK exchanges rallied by 2.32% for the three months that ended on March 31. The overall winner for the quarter was iron ore, which posted a gain of over 25%. The thinly traded lumber was up 21.4%. These are the only two commodities that moved over 20% higher in Q1. The rally in iron ore prices, reflected strengthening Chinese steel prices and increased production ahead of the country’s key construction season. This has come amid a rollercoaster ride for commodities in the first quarter. The rebound will be good news for large producers including BHP Billiton, Rio Tinto and Brazil’s Vale, whose profitability relies on the iron ore price. The economic slowdown in China continues to plague demand for raw materials around the world. In December, iron ore fell as low as $37 from $53.20 a tonne.

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