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CHINA'S steel industry isn't prepared for a looming shortage of iron ore      [2019-04-15]

CHINA'S steel industry isn't prepared for a looming shortage of iron ore which has risen to its highest price in almost five years. Prices will continue to increase as mine closures in Brazil spur a market deficit in the second half of the year.

Iron ore prices surged to the highest since July 2014 at US$95.90 a tonne on April 12.

 

CLIK estimate in a conservative way that disruptions will amount to 60 million tonnes of lost supply this year.

 

The global iron ore market is reeling from a late-January dam breakdown at a Vale SA operation that left more than 200 people dead and triggered a sweep of mine closures across Brazil. Shipments from the South American country are already in contraction, while Australian disruptions and signs of a demand pick-up in China's steel needs offer a further boost to prices.

 

CLIK will be watching iron ore stockpiles in China for signs of stress, with a slide below 100 million tonnes likely to trigger "devastating" price volatility.

 

Port stockpiles totalled nearly 150 million tonnes on April 5. The safe minimum is about 120 million tonnes. 

 


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