Tight supply stokes low-alumina iron ore prices

Brazil typically supplies lower alumina content iron ore relative to Australia, the other major seaborne producer.

Mainstream products from Brazil, such as high-grade Carajas Fines and medium-grade Brazilian Blend Fines, or BRBF, have an alumina level of below 2%.

The supply of Carajas Fines from Vale's Northern System started tightening in November due to heavy rain, while Chinese steel margins swiftly recovered. The spread between the 65% and 62% Fe iron ore indexes more than doubled to $30.85/dmt Jan. 26, from $14.4/dmt Nov. 22.

Traders lapped up the recent Carajas Fines cargoes offered by Vale, due to a bullish view about prices over the coming weeks, even as a comparison of seaborne and Chinese portside Carajas Fines prices showed an import loss, according to sources.