Iron ore prices moved above $125 per tonne in August for the first time since 2014, extending a rally driven by recovering Chinese demand and tight supply. The steelmaking raw material had gained 34% since the start of the year, making it one of the strongest-performing commodities of 2020. Prices had already reached a six-year high earlier in the month, and the move past $125 confirmed the strength of the upturn. Behind the rally was the contrast between China, where steel mills were producing at record rates, and Brazil, where the pandemic continued to disrupt mining and shipments. Vale, the Brazilian miner, had cut its 2020 iron ore production guidance in April to 310-330 million tonnes from 340-355 million tonnes, citing the impact of COVID-19. With Chinese infrastructure spending lifting steel output and seaborne supply constrained, buyers competed for available cargoes and prices climbed steadily through the summer. Some analysts cautioned that the rally could reverse once Brazilian supply recovered, but for the moment miners were benefiting from a market in which strong demand met limited availability.
Source: MetalMiner — https://agmetalminer.com/2020/08/27/this-morning-in-metals-iron-ore-price-surges-to-six-year-high/
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