Iron ore price highest since 2011 on demand outlook in China
Iron ore prices jumped on the first day of trading since the Lunar New Year in China, reaching their highest level since September 2011.
According to Fastmarkets MB, benchmark fines of 62% Fe imported into northern China (CFR Qingdao) changed hands to $ 175.05 a tonne, up nearly 4.9% from Wednesday’s trade and by 9% since the beginning of the year.
Brazil’s daily 65% Fe iron ore index rose 4.2% to a record $ 198 a tonne.
In China, labor force participation rates did not slow down as much as is normal for the Lunar New Year as fewer workers returned home. Many have stayed in the cities where they work due to covid-19 travel restrictions.
Ongoing supply issues were also likely to hold underlying prices given the covid-19 disruption in Vale’s operations and the potential for further weather-related port shutdowns during the shipping season. cyclones in northern Australia.
“Sentiment was also supported by the positive outlook for major exporters,” ANZ senior commodities strategist Daniel Hynes told Reuters.
On Tuesday, the BHP Group said it expects continued strong Chinese demand in 2021 and a recovery in global crude steel production.
Dalian iron ore is up nearly 14% this year, with tight supply adding support as Vale struggles to ramp up production due to operational constraints.
“We wouldn’t be surprised if iron ore trades briefly above its all-time high of $ 190 / t reached in February 2011, but we don’t think prices are likely to stay there for a period of time. extended, ”Citi analysts said in a Feb. 5 statement.
“Not only in China, but ex-China activity is also returning to pre-covid levels,” Elizabeth Gaines, managing director of Fortescue Metals Group, said on a conference call.
“We believe the market will remain robust for some time,” Gaines said.
