Reuters reports spot iron ore was trading close to seven-week highs after a cyclone closed down the world’s largest export terminal in Australia and heavy rains in three Brazilian states halted Vale’s shipments.
Vale declared “force majeure” on the shipments late yesterday and said it would lose roughly 20% or 2 million tonnes of its January output in the key region. Bloomberg reports Vale SA, the world number one iron ore miner, estimates at least 10 ships are waiting for the company to resume production, but that the financial impact of the disruptions would be “insignificant.”
Reuters reports offer prices for Brazilian ore in China, by far the largest importer of the commodity, were stable on Thursday with 65% grade changing hands for $152 to $154 and 66% at $159 to $161:
“There’s still plenty of underlying steel mill demand from China, they’re not just being aggressive,” said an iron ore trader in Singapore. “People aren’t chasing cargoes, but as long as cargoes are in the market there’s always a buyer.”
FT.com reports 62%-iron Australian iron ore was trading at a 7-week high on Thursday, up more than 22% since its October lows:
The rally in iron ore comes in spite of widespread investor concern about the country’s [China’s] economic growth. However, analysts say that the rise in prices has been driven primarily by supply concerns.
The Sydney Morning Herald reports Port Hedland, one of three iron ore export terminals shut down by tropical cyclone Heidi serving the Pilbara region, reopened on Thursday after a 48-hour shutdown. In excess of 1.5 million export tonnes were affected by Heidi:
A Fortescue Metals Group spokeswoman said it was looking like a relatively good cyclone season.
“This quarter is known… for having weather events across both the export and mining sides of things,” she said. “While it’s obviously not something we take lightly, the way the quarter goes it’s not a bad start so far.”