The iron ore price rose strongly on Friday evening, continuing the choppy price action seen since the beginning of the year.
According to Metal Bulletin, the spot price for benchmark 62% fines rose by 2.2%, or 91 cents, to $42.20 a tonne.
The increase took the weekly gain to 2.63%, and narrowed the year-to-date decline to 3.14%.
The bounce in the benchmark price corresponded with news of seaborne supply disruptions from Brazil.
According to Reuters, giant Brazilian iron ore miner Vale has blocked the loading of some 200,000 tonnes of iron ore per day from the Port of Tubarão following a court ordered closure.
The port moves about 35% of Vale’s iron ore seaborne supply, and is one of the world’s largest iron ore loading terminals.
The court order, issued on Thursday due to pollution concerns, also blocks access to 44,0000 tonnes of imported coal per day, which supplies much of the nation’s steel industry.
Leonardo Shinohara, a mining analyst with HSBC in Sao Paulo, suggests that should the port remain shut for four days or more, Vale will have to cease iron ore production due to storage constraints.
Reflective of this possibility, Chinese iron ore futures continued to push higher on Friday evening with the most actively traded May 2016 contract on the Dalian Commodities Exchange rising by a further 0.16% to 319 yuan.
Should this be maintained or build during today’s day session in Dalian – beginning at 12pm AEDT – it points to the likelihood of another rise in the spot price arriving later on this evening.
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