HONG KONG, April 2 (Reuters) – Iron ore prices in China reached a record high on Tuesday as market participants wrestled two dilemmas, namely the likely temporary weather-related disruptions from Australia and the rather more serious safety outages in Brazil.
A major tropical cyclone hitting the main producing and shipping areas in the world’s largest iron ore miner was always likely to boost prices, and indeed, markets largely responded as expected.
Iron ore futures on the Dalian Commodity Exchange rose 4.2 percent on Tuesday to reach 665.5 yuan ($99) a tonne, the most since the contract starting trading in 2013.
Spot 62-percent iron ore for delivery to China MT-IO-QIN62=ARG, as assessed by Argus Media, was at $88.50 a tonne on Monday, close to the two-year peak of $90.75 reached on Feb. 11, shortly after the fatal tailings dam collapse at a mine operated by Brazil’s Vale SA.
Tropical Cyclone Veronica will knock about 6 million to 8 million tonnes out of BHP Group’s production in Western Australia state, the world’s third-largest iron ore miner said on Tuesday.