Major maintenance at Australia’s two biggest iron ore exporters could help keep impressive iron ore prices at their current five-year highs.
At close on Thursday, the iron ore price was sitting at US$120.87 a tonne — not since February 2014, when the average price was $121.37/t, have we seen such highs.
And news that Rio Tinto and BHP are conducting major maintenance works that will push down their production outputs could further strengthen those prices, Peter Ker wrote for the Australian Financial Review.
That comes off the back of an iron ore market under pressure from major supply disruptions in Brazil and a 10 per cent increase in Chinese steel production.
This year’s big rise in iron ore prices has been driven by shrinking or stagnating supplies from Brazil and Australia.
In the case of the former, the Vale disaster is still impacting volumes while weather events have stopped shipments from Port Hedland for the latter.
BHP flagged an “impact expected on production” due to a major car dumper maintenance campaign in the September quarter, while Rio is conducting major rail maintenance and as such has revised down its Pilbara iron ore shipments for 2019 to be between 320 and 330 million tonnes.
This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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