Continuing the year’s trend, iron ore prices have risen further in recent weeks, with the active SGX iron ore futures contract reaching $175/tonne. Initially recovering steel demand and thereafter stockpiling drove the prior, post-summer increase. However, recent developments appear to have more to do with supply-side issues, including production disruptions at Vale’s Brazil operations and in India’s Odisha region. Although weather can also be a problem around this time of year, it seems to have played no material part in recent price moves.

These developments are primarily idiosyncratic to the iron ore market. That other industrial commodities have not seen their prices increase by anywhere near a comparable order of magnitude is more evidence of this (Charts 1 and 2). Copper and oil have recovered from their lows but have traded sideways to lower so far this month.