Supply concerns cushion iron ore prices

摘要

Seaborne iron ore prices remained largely supported in the first quarter as a seasonal tightening in supply buffered the demand destruction in China wrought by the coronavirus outbreak, but has entered unchartered territory in Q2 as demand picks up in China while cargoes destined for Europe hunt for new homes. The escalation of the coronavirus outbreak in China in the lead-up to Lunar New Year led to iron ore prices falling to $84.95/dmt CFR China on January 28, dipping below the $90/dmt mark for the first time since early December. However, despite steel sales and construction activity grinding to almost a complete halt amid a nationwide lockdown in February, iron ore prices demonstrated resilience, hovering around $80-low $90s/ dmt, as blast furnaces continued to operate due to the technical difficulty of a partial or complete stoppage.