The iron ore price did next to nothing overnight, remaining largely static from Friday’s closing level.
According to Metal Bulletin, the spot price for benchmark 62% fines rose by 3 cents, or 0.06%, to $48.24 a tonne.
Chinese iron ore futures also pushed higher overnight, pointing to the likelihood of a further increase in the spot price later on this evening. The most actively traded January 2016 contract on the Dalian Commodities Exchange rose 0.43% to 348.5 yuan.
The increase in both spot and futures prices, although tiny, came in the wake of Samarco ion ore mine disaster in Brazil last week.
“Samarco has announced it will halt production at its pelletising facility in Brazil’s south-eastern Espírito Santo state, following the accident at its tailing dam in Minas Gerais state last week,” said analysts at Metal Bulletin.
“The company will run down stocks and inventory before halting its industrial operations at the Ubu unit in Anchieta city.”
The mine closure has seen some predict that spot prices are likely to rebound modestly over the near-term on the back of tightening supply.
According to Vivek Dhar and Kofi Mensa, commodity researchers at the CBA, the impact on the benchmark price will be more muted than many people expect. If there is a risk to prices in their opinion, it will come from the disaster prompting a wider review of mining practices in Brazil.
“The major risk to the iron ore market is if the incident at Samarco leads to a broader review of mining practices in Brazil,” the pair wrote in a research note received overnight.
“This could potentially lead to delays to Vale’s much anticipated start-up of its 85Mtpa S11D iron ore project in 3Q16 and support higher iron ore prices than the market is anticipating next year.”
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