SHANGHAI, Mar 18 (SMM) – Dalian iron ore futures rose more than 3% to its highest in nearly eight months in Wednesday afternoon trade, on growing concerns about supply as nations across the world enacted measures to contain the spread of COVID-19 pandemic.
The most active iron ore contract on the Dalian Commodity Exchange for May delivery hit an eight-month peak of 692 yuan/mt in afternoon trade, before it erased the majority of those gains.
Brazilian mining giant Vale has been reportedly required to suspend its blended ore business in Malaysia until the end of this month, as the Southeast Asian country went into a two-week partial lockdown on Wednesday after COVID-19 infections in the country spiked.
South Africa shut 35 ports of entry from this week, including its biggest iron ore delivery port—Saldanha. SMM learned that iron ore delivery from the port of Saldanha is limitedly affected, as crew and passenger ships are targeted.
SMM data showed that iron ore shipments from Australia and Brazil stayed at low levels. In the week ended March 14, iron ore deliveries leaving Australian ports fell 1.37 million mt from the prior week to 15.76 million mt, even as the proportion of shipments to China edged higher.
For the same week, shipments that departed Brazilian ports were estimated to have risen 560,000 mt from the previous week, to 3.51 million mt. This was 3.47 million mt, or close to 50%, lower than the same period last year.
Demand recovery in China also underpinned prices of iron ore, as the country gets back to work. Steelmakers are recovering production following an improvement in profits and easing in inventory pressure.
A separate SMM survey showed that inventories of seaborne iron ore at Chinese ports fell for a fifth straight week last week, as deliveries from those ports to domestic consumers increased.