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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.
Chinaâs 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 worldâs 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 Valeâs 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 Chinaâs 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 dayâs 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 dayâs 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.
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