Iron ore futures jumped over supply concerns as coronavirus outbreak threatened iron ore shipments from Western Australian.
As such, the most-traded iron ore for January 2021 delivery on China’s Dalian Commodity Exchange surged by 5% day-on-day to RMB 809 per tonne on Wednesday.
The steel rebar contract on the Shanghai Futures Exchange also posted gain of 1.14% day-on-day to RMB 3,560 per tonne.
Shipping disruption for Port Hedland
Shipping crew were tested positive for the coronavirus upon arrival at Port Hedland, that led to market concerns over possible lockdown of the terminal to contain the virus.
According to local media, around 17 shipping crews were affected with the virus, after a crew change in Manila.
Port Hedland is a hub for moving iron ores and have been used by major miners like BHP and FMG. So far, the shipping operations had not been affected at the terminal due to the coronavirus outbreak, according to the Pilbara Ports Authority.
Low China’s iron ore imports in August
China’s import of iron ore dropped to a five-month low to 100.36 million mt in August, down 11% month-on-month, based on the country’s General Administration of Customs.
The declining import volumes were due to port maintenance in Western Australia over the Jul-Aug period that slowed down shipments, while the monsoon season affected Indian iron ore shipments from July onwards.
China’s port congestion also contributed to the long vessels queues and extended time taken for unloading as well as slower custom clearance for iron ore.