Last week the iron ore index published daily by Kallanish reached a new five-year record due to continued market concerns about tight supply of the seaborne product. On Thursday, KORE 62% Fe index  reached $108.23/dry metric ton cfr Qingdao, surging almost $10/tonne over four days.

This was the highest level reached since the end of April 2014 and over $40/t above the figure registered in the middle of June last year.

As anticipated, Rio Tinto is limiting supply of PB Fines because of quality issues, putting new pressure on the ongoing supply issues in the market. The miner suffered quality issues as a knock-on effect of Cyclone Veronica in the first quarter and is now being forced to limit some cargos to ensure the brand stays on specification.

As if that was not enough, the Development and Reform Bureau of Zunhua in Hebei issued a notice that it would cut power to 86 beneficiation plants for 45 days starting this week. That will take out 600,000 tonnes of iron ore concentrate from the local market, adding to the ongoing pressure on the supply side in China.