GLOBAL iron ore prices topped the US$100/t level for the first time in 10 months last week on concerns over supplies from Brazil, as the COVID-19 pandemic grows in the iron ore producing regions in the north and south of the country.
The price of 62pc Fe fines delivered to northern China rose 5.4pc to US$102.39, the highest price since last August.
Reuters reports that Brazilian giant Vale managed to reverse a court decision closing mines in the south (where the January 2019 mine wall tragedy happened) because of rising numbers of COVID-19 infections, and in the north where infections are also rising.
Sources also claim there were hundreds of COVID-19 infections at Vale’s mines in Itabira, in the southern state of Minas Gerais.
Separately an outbreak in the north in Para state, where three Vale mines – S11D, Serra Norte, and Serra Leste – are located, has claimed 64 lives in the nearby town of Parauapebas alone, Reuters reported.
These mines produce much of Vale’s high quality 65pc fines bound for the Chinese and European markets.
In a filing with corporate regulators, Vale SA said that its Itabira iron ore mining site was ordered shut under an order from labor authorities, but that it was able to immediately reverse that order after obtaining a favourable court injunction.
Vale said the injunction determined maintenance of all activities on the site, adding since the start of the COVID-19 outbreak, its priority was to guarantee the safety of its workers.
Fears about the security of Brazilian exports has been rising for the past three weeks, helping push global prices higher and adding to fears of a shortfall in global supplies after heavy rain and floods in January and February slowed shipments.
Chinese steel mills have also been forced to run down their stocks which are down more than 20pc from a year ago, to around 110mt, the lowest since 2016.
The iron oxide content of Chinese iron ore has fallen sharply in the past decade, forcing steel mills to import more and more higher quality ores from Australian and Brazilian mines operated by the big four – Rio Tinto, BHP and Fortescue metals in Australia, and Vale in Brazil.
