Chinese Spot Iron Ore Prices Shoot Up Amidst Supply Concerns
...
Spot iron ore fines Fe 62% index has jumped to USD 89.65/MT yesterday, against USD 87.90/MT, CNF China towards beginning of this week. On weekly basis iron ore prices increased by 7% as against INR USD 84/MT at mid of last week assessment.
As per the recent reports Iron ore futures in China for May contract have crossed USD 100/MT level at the early hour of todays trading. Dalian iron ore futures climb by 4.4% today in earlier sessions against yesterday's close price.
Why global iron ore prices rallied?
The prices have increased due to material shortage in global market from top exporters like Australia and Brazil. As the market was already in pressure owing to Vale's dam mishap later cyclone Veronica erupted at Australian major ports put an additional pressure on iron ore supply resulted hike in global material shortage.
As per reports, towards second week of Mar (4th -10th Mar), Australian exports dropped around 13% W-o-W to around 15 MnT due to maintenance work at Port Dampier and Port Hedland.
World's largest iron ore miners- released their output estimates for the year amidst the disruptions
o Last week, Vale reduced estimate on its iron ore sales volume for 2019 between 307 and 332 MnT. This is lower by 75 MnT against its previous estimated forecast. Furthermore, it failed to receive renewal at 17 of its operational structures.
o BHP Billiton announced its production will be affected by about 6-8 MnT amidst cyclone.
o Rio Tinto had declared force majeure to some of its contracts post cyclone. Rio Tinto estimates the overall impact of cyclone is expected to result in loss of 14 MnT of production by the miner in 2019. As a result, the production is expected to be at lower end of 338-350 MnT.
o FMG shared disruption owing to cyclone to delay about 1.5 MnT to 2 MnT.