Iron ore surges on ex-Brazil supply concerns and strong demand

Iron ore prices have surged today, Tuesday, March 10, following two days of decrease, as fresh news about one of Vale’s tailings dams being in jeopardy and strong demand have bolstered sentiments. Prices for iron ore with 62 percent Fe content have added $3.7/mt since Monday to $91.2/mt CFR, while ex-Brazil fines with 65 percent Fe have increased by $3.2/mt to $107.1/mt CFR, SteelOrbis has learned.

In total, 1.220 million mt of iron ore have been transacted at trading platforms during the day. A contract for 170,000 mt of Pilbara fines with 61 percent Fe has been signed at $89.5/mt CFR for April shipment, which corresponds to $91/mt CFR for fines with 62 percent Fe. Low-alumina Brazilian fines with 62 percent Fe have been traded at $93.4/mt CFR, with the price including about $2/mt extra for low-alumina content. Other deals are in the table below.

As it reported yesterday, Brazilian miner Vale said it is monitoring its Gongo Soco mine, following “movements” in both the primary and secondary parts of the mine’s northern slope pit. The Sul Superior dam is 1.5 kilometres away from the moving slope pit, which means that the dam may collapse at any time if the situation worsens. After Vale’s tailings dam collapse in early 2019, this latest news has raised concerns of possible further iron ore supply disruptions.

At the same time, demand for iron ore has stayed strong and expectations for April are positive, even taking into account that a few steelmakers have already announced maintenance plans for blast furnaces in the March-April period. Hunan Province-based Chinese steelmaker Hunan Valin Iron & Steel plans to implement 21-day maintenance work on a 1,080 cubic meter blast furnace in March, while Liaoning-based Anshan Iron and Steel Group has announced that it will implement 70-day maintenance on its 3,200 cubic meter blast furnace as of March 4, which will impact 420,000 mt of iron-smelting output. Sources said that strong demand for iron ore, which is mostly offered for April shipment, is connected with the predictions that the downstream industries in China will have fully resumed operations by the end of this month and steel producers will try to increase utilization rates.

Iron ore futures at Dalian Commodity Exchange have added RMB 31/mt ($4.5/mt) or 4.9 percent today to RMB 662.5/mt ($95.5/mt).

Deals for iron ore at trading platforms on March 10