A new 15-day lockdown in one of Brazil’s two main iron ore regions sent the price of high-quality ore surging to record highs on Thursday.
The shutdown is part of a series of new clamps started this week as the country experiences another surge in Covid cases and deaths from a new, far more dangerous home-grown variant of the virus.
News of the lockdowns saw the price of the rich, 65 Fe fines (from Brazil) jump to a new all-time high of $US202.90 – a rise of $US3.20 a tonne on Thursday, according to MB Fastmarkets.
The price of the more widely available 62% fe fines (delivered to northern China and predominantly shipped fromAustralia) rose $US1.58 to $US177.98 a tonne.
The country’s extreme rightwing President Jair Bolsanaro criticised the new lockdowns which were imposed by state and local governments, saying they would damage the economy.
Sao Paulo, Rio de Janeiro, Minas Gerais and other states have imposed two-week lockdowns with restrictions on all non-essential businesses.
Mining, construction and agriculture are among the sectors classified as essential, putting the burden of the restrictions on the retail and service sectors.
As a result Vale’s iron ore mines in Minas Gerais are unlikely to be affected at the moment but might be if the virus (new variant) takes hold in the mining communities in the region.
Iron ore exports from the northern mines in Carajas were impacted last year from infections which slashed work force numbers and saw mines closed or slow production levels while the virus (the old variant) rage.
The local authorities in Minas Gerais have issued an initial 15-day lockdown to tackle the spread of the Covid-19 virus, with further evaluation needed to determine whether an extension is needed.
The latest upsurge is blamed on mid-February Carnival celebrations in Brazil. While Carnival was officially cancelled in many parts of Brazil because of the pandemic private parties and festivities still happened, according to media reports.
Brazil’s health ministry reported daily deaths from Covid-19 reached a record 1,910 on Wednesday, up from 1,641 the day before and up sharply from the seven-day moving average of 1,331.
Registered cases also surged to 71,704 a day yesterday from 59,925 a day the previous day. Total Covid-related deaths reached 259,271, with 10.7 million confirmed cases. Many of the intensive care units in hospitals across Brazil’s major cities are reported operating at full capacity and struggling to cope.
Brazilian iron ore exports are rising – up 10.9% in February according to the country’s economy ministry.
Brazil exported 24.05 million tonnes of iron ore in February, up from 21.69 million tonnes in the same month last year, according to the ministry. That’s a third of Australia’s monthly total.
