Iron ore prices reach almost two-year high
Iron ore prices reached an almost two-year high on Tuesday, following January’s fatal tailings dam breach in Brazil at Vale’s Córrego do Feijão mine. Iron ore was at $86.65/dry ton on Feb. 4, up 14% since the dam breach and the highest since March 2017, according to S&P Global Platts.
Also on Tuesday, Vale declared force majeure on some of its iron ore contracts after a court-ordered halt to a mine responsible for nearly 9 percent of its output following a dam burst which likely killed over 300 people.
“Some market players are bracing for the possibility of $100 iron ore,” S&P Global’s Joseph Innace* said on Wednesday, and “seasonally, the global iron ore market does typically rise after the Chinese Lunar Holidays, as buyers tend to return with greater activity.”
Analysts believe the price surge lines up with the market halting up to 40 million metric tonnes of Vale’s iron ore production. Vale said on Tuesday that it’s temporarily stopping some operations at its Brucutu mine, potentially causing a massive production loss.
Vale’s also plans to halt production at 10 operations, cutting its annual output by 10% or 40m tonnes, upending a market that was expected to experience a year of gentle decline.
Click here for complete coverage of the dam burst at Vale’s Córrego do Feijão mine
(As quoted by MarketWatch*)