Singapore iron ore rises on cyclone-led supply disruptions in Australia

Singapore iron ore futures prices rose on Friday and were on track for a weekly gain, supported by heightened concerns over cyclone-led supply disruptions in major producer Australia.

The benchmark March iron ore (SZZFH5) on the Singapore Exchange was up 0.46% at $106.95 a metric ton, as of 0738 GMT, posting a weekly gain of 0.6%. The contract hit a four-month high at $108.8 a ton earlier in the session.

Australia’s iron ore export hub, the world’s largest, braced on Friday for a powerful tropical cyclone, forcing the closure of all major commodity ports in the country’s northwest.

China imported a record high of 1.24 billion tons of iron ore last year, with 60% coming from Australia, according to customs data.

“If there is a damage to the port infrastructures (by the cyclone), it will be hard to assess the actual impact as the situation will become serious,” said a Chinese trader, who requested anonymity as he is not authorised to speak to media.

However, the most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) TIO1! erased earlier gains to end daytime trade 0.98% lower at 810.5 yuan ($111.45) a ton, recording a weekly loss of 1.2%.

Concerns over a potential global trade war sparked by new tariffs imposed by U.S. President Donald Trump, along with an unexpected decline in demand, pressured Dalian prices.

As of February 13, the average daily hot metal output fell by 0.2% from the previous week, dipping to 2.28 million tons, reversing an earlier uptrend, according to a survey from consultancy Mysteel.

Other steelmaking ingredients on the DCE slipped, with coking coal NYMEX:ACT1! and coke (DCJcv1) down 2.21% and 1.41%, respectively.

Steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar RBF1! shed 0.46%, hot-rolled coil EHR1! edged 0.53% lower, wire rod (SWRcv1) fell 0.71% and stainless steel HRC1! dipped 0.15%.

While the short-term impact is limited, the U.S. could encourage other countries to take similar actions in the long run, potentially diminishing the competitiveness of China’s steel exports, the state-backed China Iron and Steel Association said.
Source: Reuters