NEW YORK, NY--(Marketwire - Sep 20, 2012) - Iron ore producers earlier this year had experienced a downturn in Chinese demand after officials cut the country's 2012 target growth rate to 7.5 percent -- the lowest year-on-year growth projection in eight years. But recent plans from the Chinese government to help boost their struggling economy have sparked a rally in iron ore prices. The Paragon Report examines investing opportunities in the Iron Ore Industry and provides equity research on Cliffs Natural Resources Inc. (
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The Chinese government earlier this month approved plans to build over US$150 billion in infrastructure projects in an attempt to boost their struggling economy. Steel mills across China have increased their purchases for iron ore following the announcement. Last week, prices for the commodity at the Chinese port of Tianjin saw its biggest gain in nearly years after jumping 6.7 percent to $95 a metric ton, data from The Steel Index Ltd. has shown.
"China has shown its hand," Richard Lee, a Barclay's iron ore and dry-bulk trader, said by e-mail according to Bloomberg. "It intends to add a number of new projects and mills are now short, and therefore they are restocking."
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Cliffs Natural Resources is a major global iron ore producer and a significant producer of high- and low-volatile metallurgical coal. In their second quarter 2012 results release the company maintained its 2012 U.S. Iron Ore sales and production volume expectations of approximately 23 million tons and 22 million tons, respectively.
Vale SA is a Brazil-based metals and mining company. The company reported iron ore output reached 80.5 million metric tons in the second quarter of 2012, a new second quarter record. Total production increased 15.1 percent against first quarter 2012 and 0.4 percent against second quarter 2011.
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