Chinese spot iron ore fines prices increased sharply yesterday i.e 29th May’20 to USD 100.90/MT, CFR China. The prices picked up by 5% D-o-D as against USD 96.4/MT a day before on 28th May’20. The prices have hit ten months high as on 29th May as the levels were last witnessed towards the beginning of Aug’19 at around USD 108/MT.
The spot iron ore price increase was supported by rising Chinese demand, lower Brazilian supply of material and falling port inventory.
The concerns over coronavirus have been impacting the Brazilian supplies of iron ore cargoes amid rising COVID-19 cases at the iron ore mine in Itabira Brazil, owned by Vale, which may lead to operation suspension at the mine. As per sources reports, Minas Gerais public labor ministry filed a court injunction on 23rd May for temporary closure at Itabira site. However, the ministry’s request has been overturned and conciliatory hearing between the parties has been set for June 18. The Itabira complex produced 35.9 MnT of iron ore in 2019.
As per data compiled by SteelHome consultancy, Iron ore inventory at major Chinese ports dropped to 109.5 MnT, drop of 0.5 MnT as against 110 MnT assessed a week ago.
Vale S.A. (“Vale”) through a press release informs that “ it was made aware of the Term of Interdiction, issued by the Regional Labor Superintendence and immediately filed an annulment action with an injunction request, which was granted by the judge of the 2nd Court of Itabira, determining the continuity of all Vale’s activities in the Itabira Complex”. However, the discrepancies over continuous supply of material still persist amongst the Chinese buyers.
Dalian iron ore futures picked up
The most active iron ore contract for September 2020 delivery yesterday jumped by 6.7% to 754 yuan (USD 105.50) per tonne, before closing up 6.4% to 752 yuan.
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