Iron Ore prices may rise 11.4% on supply disruptions, China stimulus
WASHINGTON (Scrap Register): International iron ore prices are forecast to rise 11.4% in calendar 2019, buoyed by supply disruptions from key mines in Brazil and Australia and China's fiscal stimulus seen as strengthening steel consumption.
As per a recent World Bank report on Commodities, iron ore prices registered a sharp increase of 16.2 per cent in January-March of 2019, primarily because of supply disruptions in Brazil and Australia. Following the Brumadinho dam rupture, all of Vale’s upstream tailings dams in Brazil have been decommissioned and operations at several mines have been temporarily suspended.
In Australia, BHP and Rio Tinto’s production were impacted by tropical cyclone Veronica, and ore shipments have been disrupted due to a fire at the latter’s export terminal. These supply disruptions amount to about six per cent of the global iron ore seaborne market.
China's latest fiscal stimulus is also expected to prop up iron ore demand and hence support prices. China will sway iron ore prices since it accounts for a half of the world's steel and three-fifths of the world's iron ore consumption.