Iron ore price jumps as Fortescue, BHP and Rio Tinto face labour shortage

Image from Fortescue.

The iron ore price jumped on Tuesday after Fortescue raised concerns over a labour shortage in Australia because of covid-19 curbs, which could hamper output and shipments.

BHP and Rio Tinto have also warned of disruptions from labour shortages as Australia faces a surge of Omicron coronavirus variant cases.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $138.39 a tonne during morning trading, up 3.7% compared to Monday’s closing.

Source: Fastmarkets

Iron ore’s most-traded May contract on China’s Dalian Commodity Exchange ended daytime trading 1.4% higher at 766.50 yuan ($121.14) a tonne, rising for a fifth straight day after overnight gains erased Monday’s losses.

Mining stocks also slid, with Fortescue down more than 4% from the previous week, Rio Tinto Group down 0.6%, and BHP down 1.2%.

Fortescue, the world’s fourth-biggest iron ore miner, posted a 2% rise in second-quarter shipments, but flagged pressures from strong demand for labour and resources, as well as supply chain constraints due to the pandemic.

“The release of Fortescue’s production report should shed light on whether recent iron ore supply disruptions have been overcome,” ANZ commodity strategists said in a note.

(With files from Reuters)