Iron ore prices remain around their highest levels in two years or more as continuing shortfalls from Brazil and Australia stoke demand from Chinese and other Asian steel mills.
BHP and Rio Tinto have already warned that their 2019 production and sales could be more than 20 million short of targets revealed in February, while Vale, the big Brazilian iron ore exporter has said it is looking at a minimum shortfall of 50 million tonnes.
The size of the Vale shortfall was confirmed this week with news of a 25% slump in Brazilian iron ore exports in March.
Figures from Brazil’s trade department showed the country exported 22.18 million tonnes of iron ore last month compared with 29.95 million tonnes in the same period last year.
Volumes also fell by 23.33% from 28.93 million tonnes the previous month.
March shipments were the lowest in six years.
The news and that from Rio Tinto for a 10 to 14 million tonne shortfall (sure to be larger with one of its two terminals at Cape Lambert still out of operation) and BHP – around 10 million tonnes – saw the Metal Bulletin 62% index price jump another 3.5% to $US93.08.
The price is now close to 9% in four days and the 62% fines price is at its highest since March 2017 and is now up 45% since November 22 last year.
The prices of 58% fines (the basic product from Fortescue) and 65% fines (Vale’s basic product) jumped, settling at $US76.56 and $US104.80 a tonne respectively, up 2% and 2.3% from Tuesday.
58% fines has rallied 93% since late November and now sits at levels not seen since May 2014. No wonder the Fortescue share price is up close to 84% so far this year. BHP shares are up 15% and Rio shares more than 26%.
Wednesday’s close saw 65% fines settle at the highest level since March 2017.
The big rise had no impact on BHP shares on Thursday – in the 52 point slide in the ASX 200, BHP shares lost 1.2% $39.42, Rio shares eased 0.7% to $99.63 and Fortescue shares fell 1.16% to $7.70.
