Iron ore futures rose above $116 on Tuesday as investors assessed potential impact after a Brazilian court ordered a shutdown of Vale’s operations at the Viga concentration plant; at the same time authorities in Australia are contending with a rising number of coronavirus cases.
In a statement released by Vale, the Brazilian miner was ordered the waste disposal and construction works at B7 dam by a municipal judge in Minas Gerais state. Meanwhile, Australian defence personnel are being deployed to Port Hedland, one of the world’s largest iron ore loading ports, to help contain a coronavirus outbreak on a bulk carrier that last changed crews in the major seafaring city of Manila.
The port is used by some of Australia’s top iron ore miners, including BHP Group and Fortescue Metals Group, but operations had not been impacted, the Pilbara Ports Authority said.
“The supply disruption could provide short-term support to the market, which has eased from the six-year highs made earlier this month,” commodity strategists at ING said in a note. On the demand side, there is expectation among market participants that China’s steel demand is likely to remain strong after the “Golden Week” holidays, especially for the Brazilian iron ore with low alumina contents.