https://www.miningweekly.com

Stilted supply boosts price

4th December 2020

By: Khutso Maphatsoe

journalist

     

Font size: - +

In the past year, the price of iron-ore has recovered well, mainly on the back of constrained supply in South America and the economic recovery in China, with the latter driving consumption, explains international commodities consultancy Core Consultants MD Lara Smith.

She notes that there is uncertainty about whether Beijing’s efforts to boost the economy in the aftermath of Covid-19 will sustain Brazil coming back on line or whether this will signal a bear market.

“South Africa is the third-largest contributor to seaborne iron-ore supply. China’s stimulus packages are focused on construction, so demand for iron-ore could continue to climb. Further, South Africa is in a fortuitous position because most of its supply is exported to China.”

Smith says that, as iron-ore stocks are still high – 114-million tonnes as of November 12 – the industry can expect to see a strong buying trend from China until February.

“Consider the tailings dam disasters in Brazil and that Brazilian iron-ore has yet to recover fully while China’s productivity numbers are picking up, which are evident in its purchasing managers index,” she says.

She notes that South Africa has competition from India, which is starting to increase supplies to China.

Nevertheless, it is in a strong position to benefit from the upswing, Smith concludes.

Edited by Nadine James
Features Deputy Editor

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION