The state of the global iron ore supply remains a key risk factor for market participants in 2020 due to mining operations being affected by the Covid-19 pandemic, sources said.
Market sentiment is mixed about whether the tight supply situation will persist in the second half of 2020, especially after Vale said its output for this year was likely to reach just the lower end of its forecast range.
"Iron ore inventory at ports in China has been lower compared with previous years," a buyer in Beijing said. "With the recovery of operations following better control of Covid-19, shipments are increasing and inventory is rebounding, but it is still at a low level, implying a supply concern especially when steel production is strong in China."
Price swings
Iron ore prices have been very sensitive toward changes in market fundamentals, especially production reports released by key miners.
On July 21, the most-traded iron ore futures September contract on the Dalian Commodity Exchange (DCE) surged by 2.94% to reach 841 yuan per tonne.
Industry sources said this was the...