Iron ore prices tumble almost 9% in a week despite supply tightening

  • Tuesday, March 03, 2020
  • Source:ferro-alloys.com

  • Keywords:Iron ore prices tumble, supply tightening
[Fellow]Iron ore prices have fallen 8.6% over the past five trading sessions despite supply tightening due weather events crimping exports from key exporters Australia and Brazil, latest data showed Monday.
[Ferro-Alloys.comIron ore prices have fallen 8.6% over the past five trading sessions despite supply tightening due weather events crimping exports from key exporters Australia and Brazil, latest data showed Monday.
 
Prices fell sharply despite supply tightening due to a heavy monsoon season in Brazil since December and recent cyclones in Western Australia. Iron ore exports from Brazil averaged 5.22 million mt/week in the first eight weeks of 2020, down sharply from 7.2 million mt/week a year earlier. From Australia, exports averaged 15.76 million mt/week, down from 16.37 million mt/week in the same 8-week period of 2019.
 
While smaller and more flexible end-users quickly adjusted their sinter feed to cheaper alternatives or lowered production as steel margins turned negative, large end-users could not follow suit due to the more complicated nature of running large blast furnaces. A decision to lower production rates or adjust their sinter feed would hinge on a longer-term outlook as alterations to their blast furnace production processes are not easily reversible.
 
However, with accumulating steel inventory levels now affecting storage space, market expectations are for large end-users to begin lowering their production rates in Q2, or to start unscheduled maintenance periods to manage their production costs. (S&P Global Platts)
 
  • [Editor:kangmingfei]

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