The Rising Influence of Rising Affluence

[DewDiligence]

(CLF)—Iron-ore price hits 7-month high:

https://www.wsj.com/articles/brazils-coronavirus-crisis-disrupts-iron-ore-market-as-prices-surge-11589982491

Brazil’s deadly coronavirus outbreak has disrupted global supplies of iron ore just as demand from China is revving up, pushing the price of the steel ingredient to a seven-month high.

…Front-month futures for ore with 62% iron content jumped 10% to nearly ¥759 ($107) a metric ton Wednesday on China’s Dalian Commodity Exchange. That is their highest closing price since October 2019.

…The squeeze on supplies has struck at the same time as demand for the raw material from China’s steel sector is picking up. Steel mills there produced 85 million tons of crude steel in April, according to the National Bureau of Statistics, almost 8% higher than the 79 million tons made in March.

…Also boosting iron-ore demand: a shortage of recycled steel stemming from disruptions in the scrap-metal industry, said Mr. Capoferri. That has led to difficulties at electric-arc furnaces, which use less iron ore and more scrap steel than traditional steel blast furnaces.

CLF’s HBI is a feedstock substitute for scrap steel in EAFs. Despite the constriction delay due to COVID-19, CLF expects its (Toledo, OH) HBI plant to start commercial production during 2H20 (#msg-155565769).