Iron ore is one of, if not the, most used elements in the modern world. Iron is the most important part of the steelmaking process and about 98% of the world’s iron ore is used to make steel. It has a combination of strength and durability most metals cannot compare to. Because of this, in much of the world products that contain steel are seen almost everywhere, from small household appliances to cars and major construction projects.
A recent spike in global iron ore prices can be attributed to a major spike in its price on Chinese commodity exchange markets. China is the largest producer and consumer of iron ore in the world, by a large margin. This gives China the potential to consistently set and maintain the global price of iron ore. Chinese speculators trading on commodity markets have caused spikes in the prices of goods before. In 2016, speculatory trading on Chinese commodity exchanges shot the price of zinc, copper, and other commodities up to the highest prices seen in years. Fang Xinghai, the Chinese vice chairman of the China Securities and Regulatory Commission, was recently quoted as saying that China is looking to become the world’s major price-setter for commodities in the world. With major Chinese government officials setting goals like this, the global economy could be in for a huge shake-up.