Iron Ore Remained Flat As Less Demand Gets Offset By Supply Disruption

  • Mar 26, 2019 AEDT
  • Team Kalkine
Iron Ore Remained Flat As Less Demand Gets Offset By Supply Disruption

Iron ore prices remained flat on 26th March 2019, with Dalian Commodity Exchange (DCE) Iron Ore 62% Fines closed at RMB 609 per tonnes, down by 0.33% as compared to its previous close.

Iron ore prices remained flat on 26th March 2019, with Dalian Commodity Exchange (DCE) Iron Ore 62% Fines closed at RMB 609 per tonnes, down by 0.33% as compared to its previous close.

The high steel prices in China is supporting iron ore prices. However, the concern over the possible slowdown in the global economy is exerting slight pressure on iron ore prices.

China’s increased stance to curb the pollution level across various cities in China have exerted pressure on low-grade iron ore as compared to prices of high-grade iron ore.

In the recent event, another factor which supported the iron ore prices and prevented any steep fall in it from the global economic slowdown concern was the supply disruption.

Rio Tinto, the world’s second-largest iron ore producer, halted rail operations in the Pilbara region and mining at the Robey Valley operations in Western Australia as cyclone Veronica passed through the Pilbara region.

Veronica forced the iron ore mines operating in the region to halt the operations and caused a short-term supply disruption in the supply chain which in turn supported the iron ore prices.

In a nutshell, iron ore prices traded flat as one event offset the other. The disruption in the supply chain offset the concern of a slowdown in the global economic condition.

The Cyclone caused Rio Tinto (ASX: RIO) and BHP Billiton (ASX: BHP) to suspend a few operations in the region. However, the potential gains of supply disruption were discounted as Vale’s resumed the operation of Brucutu Mines in Brazil.

The demand for iron ore is steady so far, but the mills are expecting to re-operate in April, which could mark an increase in demand for iron ore. However, it will depend upon the stance of the Chinese government to curb the environmental pollution to either re-open the sintering mills or extend the suspension, which would decide the demand dynamics further in China’s domestic market.

Many Iron miners such as BHP, RIO, FMG, traded higher on the Australian Stock Exchange. BHP rose to mark a high of A$37.630 after starting the day session at A$37.130. The share prices ended the session at A$37.550, up by 1.13% as compared to its previous close.

Rio Tinto shares also gained the momentum to mark a high of A$94.150 after starting the day session at A$93.000. The share prices finally settled at 93.800 for the session, up by 0.72% as compared to its previous close.

Fortescue Metals (ASX: FMG) ended the day’s rally at A$6.620, up by 1.69% as compared to its previous close. The share prices reached the level of A$6.650, which marked the day’s high of the session.

The fundamentals in the iron ore market are relatively balanced with supply balancing the demand, and both are moving in conjunction with each other. However, a reckoning of the future prices of the raw material will require various inputs such as development in the global economy, economic data such as the U.S. Building permits, and the fulfilling of supply disruption.


Disclaimer

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.

 

All pictures are copyright to their respective owner(s).Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.

 

There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK