Iron ore prices surged on the first trading day since the lunar new year in China, hitting their highest level since September 2011.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China (CFR Qingdao) were changing hands for $175.05 a tonne, up nearly 4.9% from Wednesday’s trade and up 9% YTD.
The daily index for iron ore 65% Fe Brazil rose 4.2%, to $198 a tonne, an all-time high.
In China, activity rates didn’t slow as much as is normal for the Lunar New Year because not as many workers returned home. Many remained in the cities where they work because of covid-19 related travel restrictions.
Ongoing supply issues were also likely to keep prices underpinned given covid-19-related disruptions at Vale’s operations, and the potential for further weather-related port stoppages amid the northern Australian cyclone season.
“Sentiment has also been supported by positive outlooks from the major exporters,” ANZ senior commodity strategist Daniel Hynes told Reuters.
On Tuesday, BHP Group said it expected a continuation of strong Chinese demand in 2021, and a recovery in global crude steel production.
Dalian iron ore has risen nearly 14% this year, with tight supply adding support as Vale struggles to boost output due to operational constraints.
