Brazil’s worsening Covid-19 crisis is making waves in the commodities world with reduced iron ore shipments from the South American country lifting the price of the steel-making material by 30% to almost $100 a ton.
There could be more to come with some analysts forecasting a return to last year’s peak price of $125/t, an unexpected rise also caused by events in Brazil.
Bulk carriers loading iron ore at Port Hedland in Australia which is benefiting from a worsening ... [+] BLOOMBERG NEWS
Other iron ore exporters, especially Australia, are the winners from Brazil’s latest setback while China is bearing the brunt of the increase.
Last year’s price-driving event in Brazil was the death of 270 people after a dam designed to hold back mine waste collapsed, forcing the closure of a several mines and a sharp fall in exports.
Covid-19 Hits Brazil’s Mineral Exports
This year’s setback is Covid-19 and its potential to cripple Brazilian mine and port operations.
Adding to market pressure, which has already seen the benchmark ore price rise from around $75/t to latest trades at $98/t, is strong demand for steel in China as it stimulates economic growth after its Covid-19 lockdown.
Brazil, unlike many other countries, has not uniformly enforced a lockdown with the result being rapid and widespread increase in Covid-19 infection rates which earlier this week saw the U.S. ban flights from Brazil.
