Interruption of iron ore production in Brazil lifted
by David Fleschen
In Brazil, the world's largest iron ore producer has been granted permission to gradually resume production at the "Itabira" mine complex, following new measures against the corona virus. This meant that production was "only" at a standstill for just under two weeks and not as long as initially feared. Accordingly, the company announced that it had only lost less than 1 million tonnes of iron ore.
So while the production loss was relatively small, the iron ore price in Singapore fell only slightly, measured by the most traded futures contract. It is still holding at around USD 100 per tonne and has therefore not yet relinquished all the gains since the production interruption in Brazil. Apparently new production stoppages are feared, as the authorities are now investigating the producer's corona measures in other mines. The currently affected mines in the northern state of Para account for around 35% of the company's total production, while the "Itabira" mine complex in the more southerly state of Minas Gerais accounts for around 10% of production.
Source: Commerzbank Research, Photo: Fotolia