Last week iron ore surged again to a level of above $90/tonne cfr Qingdao, according to the Kallanish index for 62% Fe Australian fines. The recovery confirms the intense volatility of iron ore in the current uncertain market. Chinese production is picking up again after the coronavirus issue while European and North American economies are bracing for a signifcant impact from the latest spread of the virus in those regions.

The recovery in seaborne iron ore prices was even more interesting because it came during a dramatic week for global stock exchanges and oil prices. The New York Stock Exchange overall fell by around -30% during the first two weeks of March and Brent oil prices lost almost -50% compared with the levels seen in January this year.

Iron ore prices in China have been supported by restocking demand from domestic mills. More mills have been active in the market, but they are largely only restocking when necessary. Sentiment for iron ore, however, has been buoyed also by rising local rebar prices. As construction sites in China resume there is hope that steel market inventories will begin to decline, further supporting prices.

China’s iron ore port stocks have meanwhile continued to decline. Total stocks across 35 ports fell another 400,000 tonnes last week to 110.17 million tonnes, according to a count by SMM. That has been driven in part by higher deliveries from ports. Overall blast furnace activity this month is expected to be slightly higher than February as some furnaces resume production.