Iron ore prices for December 8, 2020:
Spot at new highs. Paper flamed out. Steel ahs not updated.
Some explanation of recent price strength from Robert Rennie:
Our bulk shipping activity models point to surprisingly weak November iron ore exports at 70mt, down from 76mt in October. Given the strength of Chinese iron ore imports July through October, we had expected to see iron ore exports rise in November as the impact of Covid delayed maintenance waned. That view proved to be too optimistic. Port Hedland exports for the month of November were the second lowest in almost the last 2 years suggesting the maintenance that BHP flagged in July/ August and subsequently that ‘disruption could continue through the end of the year’ may have been a factor.
Still, that is not enough to explain price jumps. I think we’re into a new hoarding cycle boosted by strong demand, slowly recovering supply, restocking inventories, La Nina, a falling DXY and rising geopolitical tensions.
I still think prices can go higher while these forces prevail.