Iron ore prices continue to climb, on persistently tight supply, including in Brazil, and resilient Chinese demand.
Record steel production in China and persistent supply problems have pushed prices up in recent months.
Last week, Brazil’s Vale interrupted production at its Timbopeba mine and part of its Alegria mine after prosecutors ordered the evacuation of an area around the nearby Xingu dam, in the state of Minas Gerais. The closures will reduce its output by 40,000 tonnes a day.
According to Fastmarkets MB, Benchmark 62% Fe fines imported into Northern China (CFR Qingdao) were up 0.7%, changing hands for $220.77 a tonne.
Meanwhile, Chinese authorities ordered the closure and inspection of all non-coal underground mines in Shanxi province following the flooding of an iron ore mine in Daixian.
According to Mining.com, temporary annual supply gap is of 14.6 million tonnes from Vale’s Timbopeba & Alegria mines and of 14.97 million tonnes of concentrate from Shanxi province.
“We estimate this latest rally will be sustained for the next few weeks given that it is fundamentally driven by the temporary removal of 30 million tonnes of annual iron ore supply,” Navigate Commodities said in a note.