Iron ore prices for June 2, 2020:
AFR has a great story today:
The Brazilian company at the centre of the iron ore price rally says its mines are running on minimum staff levels to prevent the spread of the coronavirus among its workforce, as its licence to operate comes under extreme pressure from Brazilian regulators.
Vale told The Australian Financial Review on Tuesday that it was sending home not only those workers that tested positive to the virus, but also anyone who had come into contact with an infected worker.
…Morgan Stanley analysts said Vale was exporting iron ore at an annualised rate of barely 250 million tonnes in the six weeks to May 19; well below the pace required to meet its official target of between 310 million and 330 million in 2020.
Asked to explain the weak port data, Vale said there had been no “material impact” on production to date from the virus, and the company has retained its official production target.
So far. Call me doubtful:
Chinese demand indicators still look very weak outside of empty apartments and bridges to nowhere:
But that’s all iron ore needs so long as Brazil is offline in any measure.
I retain a $130 target.