Asia | China | Commodities | COVID
Iron ore prices have risen strongly over the past month, continuing a trend that began over summer. However, prices now far exceed those implied by a symmetric recovery from the Covid demand slump. Now up nearly 40% YTD, iron ore prices have outperformed both industrial and non-industrial commodities in 2020 (Chart 1). Indeed, iron ore prices are increasingly an outlier, although energy prices have recently begun to catch up.
While there have been some Covid-related supply issues this year, they have been too small to impact prices significantly. The ‘Big Four’ producers – Vale, Rio Tinto, BHP and Fortescue – did experience some interruptions. But the big supply-side development this year has been a shift towards new production in places as diverse as Ukraine, Canada, Chile and Liberia, which in aggregate has adequately filled any temporary gaps from the majors.
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