CRU: Iron ore rises despite slow market

The iron ore price has edged up further from the already high level seen last week. The market is generally slow, meaning that the moderate price increase came from the bullish outlook from the market following last week’s stimulus announcements from China and expectations of restocking picking up.

Supply fell w/w from both Australia and Brazil as operations slowed down over the Christmas holiday period. Port Hedland volumes edged up by 0.2 million metric tons to 11.9 million metric tons, outperforming last year’s volume by almost a full 1 million metric tons, but Rio Tinto’s volumes declined by much more. FMG announced that there was a train derailment close by the Cloudbreak mine on December 30, which is expected to be resolved by January 2. Shipments have held steady, though the drawdown in port stocks will affect future outflow. Mine stocks are generally low so production is likely to continue as normal. Shipments from northern Brazil held steady w/w while shipments from southern Brazil declined.