Iron ore prices soared to nearly $US110 ($157.4) per tonne yesterday, a level not seen since August 2019.
Trading Economics recorded a top price of $US108.96 per tonne as coronavirus cases in Brazil continue to climb, triggering fears of supply disruptions as demand from China recovers.
Being one of the three largest producers of iron ore along with Australia and China, the uncertainty in Brazil has led to high prices as China enters an economic recovery post coronavirus.
The Chinese Government has recently pledged to increase its spending on infrastructure construction to offset the impact the pandemic had on the nation’s economy, upping its demand for iron ore to make steel for infrastructure and other construction projects.
Prices have continued to remain above $US100 almost every day since major Brazilian headquartered miner Vale suspended operations at the Itabira mining complex in early June due to rising cases of the virus.
This is in contrast with April’s monthly average iron ore price of $US83.40 per tonne.
Trading Economics expects prices to remain high at least until the end of the September 2020 quarter and even out back to the $US80–$US90 per tonne mark within the next year.
“Iron ore is expected to trade at $US102.28 per metric tonne by the end of this quarter, according to Trading Economics’ global macro models and analysts’ expectations,” Trading Economics stated.
“Looking forward, we estimate it to trade at $US89.33 in 12 months’ time.”