Strong demand from Chinese steel mills and renewed supply concerns about Brazil saw iron ore prices urge to new highs on Monday.
The price of the key 62% Fe fines delivered to northern China surged $US12.06 to a new high of $US176.04 a tonne.
The price of 65% Fe fines from Brazil jumped a $US13.10 to $US190.10 a tonne, also a new high.
Monday’s jump took the gain for 62% Fe fines so far in December to more than 31% and for 2020 year to date to 80%.
Instead of suggesting $US180 a tonne as the target (as we did on Monday) by the end of this month and the year, $US190 to $US200 a tonne is now a gettable range if the bad news flow from Brazil continues or the big wet in the Pilbara caused delays to shipping.
The news of another share price rise will see traders chase the shares of BHP, Rio Tinto and Fortescue Metals on the ASX today.
The share prices of all three rose on Monday – BHP was up 1.18% to $43.66, Rio, up 0.9% to $118.60 and Fortescue shares surged 4.9% to new all time high of $24.04
But that will be going against the trend as the overnight futures market is showing a 24 point drop for the ASX 200 at the start of Tuesday’s session.
Traders said mixed news about events involving Vale, the big Brazilian miner and exporter drove the latest surge.
There was a landslide at Vale’s Córrego do Feijão mine on Friday which killed a third party contractor.
The slide saw Vale’s permit for running operations in Brumadinho city (which covers the mine) suspended for seven days.
The Metal Bulletin said the Brumadinho city hall decided to suspend the permit after the accident, which occurred during maintenance activities in the mine on Friday.
Vale had halted mining operations at the Córrego do Feijão mine in January 2019 after the tailings dam wall collapsed on January 25.
Earlier Vale had received official approval to start construction works of its $US500 million Capanema iron ore project in southeast Brazil, due to start producing ore in the back half of 2023.
The works are part of a plan to restart activity at Capanema, in the southeastern state of Minas Gerais, and build a new long-distance overground conveyor belt to transport ore to revamped stockyards and despatch facilities at Timbopeba.
The works will add 18 million tonnes a year to Vale’s output by the end of 2023.
