Iron ore price up after mine closures in Brazil and China

Iron ore transported by rail. (Reference image from Piqsels, CC0).

Iron ore prices rose again on Monday on persistently tight supply and resilient Chinese demand.

Benchmark 62% Fe fines imported into Northern China (CFR Qingdao) were up 0.7%, changing hands for $220.77 a tonne, according to Fastmarkets MB.

Record steel production in China and persistent supply problems have pushed prices up in recent months.

Last week, Vale interrupted production at its Timbopeba mine and part of its Alegria mine after prosecutors ordered the evacuation of an area around the nearby Xingu dam, in the state of Minas Gerais. The closures will reduce its output by 40,000 tonnes a day.

The company is now considering the use of remote-controlled trains near the tailings dam for the flow of its production.

Meanwhile, Chinese authorities ordered the closure and inspection of all non-coal underground mines in Shanxi province following the flooding of an iron ore mine in Daixian.

In numbers, that’s a temporary annual supply gap of 14.6 million tonnes from Vale’s Timbopeba & Alegria mines and 14.97 million tonnes of concentrate from Shanxi province.

“We estimate this latest rally will be sustained for the next few weeks given that it is fundamentally driven by the temporary removal of 30 million tonnes of annual iron ore supply,” Navigate Commodities said in a note.

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