BNP Paribas said it has found a way to speculate on the possible trend of iron ore prices by tracking China's economic activity and the performance of the renminbi, according to Bloomberg on the 25th. The bank's numerical results now show that iron ore prices are currently undervalued and should rise between now and the end of the year.

"based on the data we have so far, assuming the inherent relationship between them is not broken, iron ore prices can return to almost $80 a tonne by the end of the year," Gabriel Gersztein, head of foreign exchange and interest rates in Latin America and commodity quantitative analyst strategist for France and Pakistan, said in an interview. "We already have the information, and that's the subtlety of this approach. "

Iron ore prices have fluctuated in recent years, often making bank forecasts nonsense. It rebounded from a low below $40 in late 2015, soared the following year, but fell sharply again in 2017. The prospect of rising iron ore prices derived by the Fapa model runs counter to the views of Goldman Sachs Group and Capital Macro, both of which have warned that iron ore prices will fall as global supply grows.

"the renminbi is not only a leading indicator of iron ore prices, but also a leading indicator of all aspects of China's economy," said Gersztein, who has a master's degree in econometrics and statistics and a doctorate in finance. "We have found strong evidence that it is the renminbi that has a lagging impact on the final price of iron ore," he said in a telephone interview from Sao Paulo on July 21.

The price of 62% grade iron ore in Qingdao port was reported Monday at US $67.86 per dry ton, according to the Metal Guide. The move follows a surge in iron ore prices this year to a high of nearly $95 in February and a low of nearly $53 in June. France and Pakistan advised investors to hold long January SGX Asian clearing bank contracts, with a first target price of $72.50.