Demand for iron ore from China has revived today, Tuesday, March 24, and prices have increased after yesterday’s slump by $6.5/mt as new supply concerns have appeared in the market. South Africa has announced a 21-day lockdown, while Brazil’s Vale has finally halted its Malaysian blending center. Prices for iron ore with 62 percent content have added $3.7/mt today to $83.5/mt CFR, while ex-Brazil fines with 65 percent Fe have gained $5.2/mt to $102.2/mt CFR.
Three fixed-priced deals have been heard on Tuesday on trading platforms. 170,000 mt of Pilbara fines with 61 percent Fe have been traded at $81.7/mt CFR. Another cargo of 65,000 mt of Brazilian fines with 65 percent Fe have changed hands at $102.15/mt CFR. Moreover, Australian Yandi fines with 58 percent Fe have been sold at the April index with a $3.2/mt discount.
The government of the Republic of South Africa has announced a 21-day nationwide lockdown from March 26 to curb the spread of the Covid-19 virus. As a result, iron ore producer Anglo American has said that it “will review the detailed regulations relating to this action that are being published, including in relation to exemptions for certain business activities, and will issue a further statement in due course,” according to the official statement. Market sources believe that supply disruptions are inevitable. The Anglo American iron ore subsidiary in South Africa is capable of producing about 40 million mt of iron ore per year and its iron ore output was10.5 million mt in the third quarter of 2019.
Vale has said yesterday that its production and shipping arm in Malaysia will suspend operations until March 31 and that the impact on sales in the first quarter this year will be about 500,000 mt.
Iron ore futures at Dalian Commodity Exchange have increased by a slight margin of RMB 1/mt ($0.14/mt) today to RMB 639,5/mt ($90/mt).