Seaborne iron ore prices rebounded on Tuesday in expectation of a stronger government response to the coronavirus. In the near term however a stronger support for iron ore may be mills continuing need to restock.
The Kallanish KORE 62% Fe index recovered $3.72/tonne to $84.84/dry metric ton cfr Qingdao. On COREX, 120,000 tonnes of Carajas fines shipped on 31 January sold at $101.8/t. That was $5.35/t stronger than its low on 3 February, but still 10.55/t lower than the high for the year on 20 January.
A combined cargo of 90,000t of Jimblebar and 80,000t of Yandi also sold at a floating price. On the Dalian Commodity Exchange May iron ore settled at CNY 600.5/t ($86/t), up CNY 20.5/t, while on the Singapore Exchange March 62% Fe futures settled up $3.91/t at $83.72/t.
Tuesday saw ferrous prices rebound after Xi Jinping visited a hospital and Beijing signalled it could support economic activity once the coronavirus is under control (see separate article). Iron ore has so far been hit less hard than some analysts had feared. That is in part because EAF remained in the front line in terms of costs. Most EAFs are no longer operating, whereas blast furnaces remain less flexible. Iron ore has also been supported by the earlier drawdown in port stocks and disruption to supply in the last week.