The surge in international iron ore prices is due to Chinese huge demand

Brazil’s worsening covid-19 crisis and reduced shipments of iron ore from the South American country have led to a spike in global iron ore prices, thanks to strong Chinese demand.

On may 26, china’s benchmark spot price of 62% of iron ore reached 100$ a tonne (a $150), up from $$us90 a tonne last month, according to the australian exchange market index. Benchmark prices peaked at 107$us($161) a tonne on wednesday, the highest level since october. An upward trend in iron ore prices is expected to continue, Chinese steel production remains resilient, and Brazil’s covid-19 restrictions further hamper iron ore production. Brazil, unlike many other countries, has not implemented a uniform embargo, resulting in a rapid and widespread rise in covid-19 infection rates. Earlier this week, the United States banned flights from Brazil. A sudden surge in covid-19 cases occurred in the Brazilian state of Pará(state of para), where about 29 per cent of the country’s iron ore is produced. Vale’s capacity has been below capacity following the closure of several mines following the deadly dam-break disaster in the early 2019 breumanio tailings reservoir.

The latest mining output data from brazil, according to a forbes (forbes) report, show a 12 per cent drop in iron ore shipments compared with last year, while australia’s two largest iron ore producers have boosted production —— rio tinto (rio tinto) by 7 per cent and fortescue metal group (fortescuemetalsgroup) by 24 per cent. & McKinsey (mckinsey), quot; Management Consulting.

Post time: Jun-05-2020