Iron ore prices have reached a new record high today, Monday, December 21, mainly supported by positive expectations for the near future, rising fears about disruptions in supply from Brazil, and the unprecedented hike in futures prices.
Prices for iron ore fines with 62 percent Fe have reached $175/mt CFR on Monday, surging by $12/mt since Friday or up more than seven percent. Brazilian fines with 65 percent Fe have added $13/mt to $188/mt CFR, SteelOrbis has learned.
The price spike has happened despite slow trading activity at trading platforms and at Chinese ports today. A deal for 100,000 mt of Pilbara fines has been done at the December index + $2/mt today.
The market has been worrying about possible iron ore disruptions affecting the largest miner Vale after a landslide at a mine near the site of the 2019 Brumadinho dam disaster killed one person on December 19. “The worker was on an excavator, carrying out maintenance activities, when he was hit by a landslide from the paralyzed pit embankment… On-site maintenance activities will be suspended for further studies and assessments of safety conditions,” Vale said in the statement.
Also, the expectations for the market development in the near future is positive. “The iron ore price is expected to remain above US$100 a tonne until mid-2021, before easing to just over US$75 by the end of 2022,” the Australian government’s Department of Industry, Science, Energy and Resources has said in its quarterly report. The authority also added that prices are expected to remain strong for the next six months and China’s demand is expected to remain high.
Surging iron ore futures have provided great support for spot prices. At Dalian Commodity Exchange, May futures for iron ore have surged by RMB 101/mt ($15.4/mt) since Friday to RMB 1,144.5/mt ($174.7/mt).