Iron ore price, page-21404

Further
Why China needs Australian iron ore
Elouise FowlerReporter
May 14, 2020 – 5.39pm
Save
Share
Analysts have shot down Beijing's threat that China will replace its massive Australian iron ore imports with Brazilian ore, as China opens up another front in the fledgling Australia-China trade war.

State-controlled media The Global Times warned China could abandon Australian iron ore as it prepares to slap restrictions on Australian beef and barley after Beijing accused Australia of flouting world trade rules.


China imported a staggering 62 per cent of its iron ore from Australia, more than double the 21 per cent imported from Brazil in 2019. Bloomberg

The accusation from Australia's largest trading partner follows Prime Minister Scott Morrison's calls for an international inquiry into the handling of COVID-19.

But one major obstacle undermines China's threat to replace Australian iron ore with Brazilian: there simply isn't enough of the core commodity used to make steel to meet China's demand.

"The market is very tight, everyone is running as hard as they can ... you couldn't find a spare tonne elsewhere in the market," UBS analyst Glyn Lawcock said.

as major rival Brazil cut supply after being hit with safety problems, weather issues and, now, COVID-19.


RELATED
Why China's too smart to hurt Aussie iron ore
While Fortescue Metals chief executive Elizabeth Gaines shied away from commenting on the trade skirmish, she said the major iron ore producer has seen China's demand for Australian ore increase and expects that to continue.

“The Chinese steel industry produced 234.5 million tonnes of crude steel in the March quarter, an increase of 1.2 per cent compared to the prior corresponding quarter, supporting strong ongoing demand for iron ore.

“We see strong ongoing demand for iron ore and anticipate a steady recovery in economic activity in China which will continue to contribute significantly to WA's and Australia's prosperity,” Ms Gaines said.

China imported a staggering 62 per cent of its iron ore from Australia, more than double the 21 per cent imported from Brazil in 2019, according to UBS data. Port Hedland data shows China's demand for Australian iron ore dwarfs all other countries.