Iron ore up sharply due to cyclone Claudia, lower port stocks in China

Tuesday, 14 January 2020 15:33:31 (GMT+3)   |   Istanbul

Iron ore prices moved up visibly on Monday and have continued to rise today, Tuesday, January 14, with the pace of growth even more rapid. The main reason has been the possible delays of shipments from Australia due to cyclone Claudia, which has intensified to category three today. Moreover, customers are still interested in purchases ahead of the holidays, which has resulted in much lower stocks at Chinese ports. Prices for fines with 62 percent Fe content have added $1.6/mt to $96/mt CFR today, while the price of iron ore with 65 percent Fe content has increased by $3/mt to $110/mt CFR on the same day.

At the GlobalOre platform, about 190,000 mt of Brazilian 65 percent Fe fines have been traded at $110/mt CFR, indicating that the gap between higher grade and mid-grade iron ore fines has increased to $14/mt against $12.4/mt on Friday, January 10. A cargo of 90,000 mt of Mac fines has been sold at the February index with a discount of $2.85/mt for end of January-early February shipment. About 80,000 mt of Newman lumps have changed hands at the February index plus $0.1/mt. Trading at Chinese ports has been healthy as well. According to the trading source, some customers are still in the market and they will leave very soon, so they need to finish restocking. Inventories at Chinese ports on Friday were about 1.5 percent lower than a week ago and shipments have been slower recently, while demand has remained high, sources said.

Supply concerns have also been among the reasons, supporting the uptrend. Category three tropical cyclone Claudia has been moving to the northwest of the Pilbara region, so supply disruption risks have increased. However, “Severe Tropical Cyclone Claudia remains well offshore from the WA coast and is forecast to weaken [on Tuesday evening] as it moves further away. The cyclone does not pose a threat to coastal communities,” the Australian Bureau of Meteorology said.

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