Iron Ore Under Pressure After Selloff

Iron ore futures under pressure again in Singapore as participants come to terms with a sharp sell off this week.

• Iron ore's impressive rally of 2020 has hit some speed bumps in the opening weeks of 2021. Futures are down over 15% this year and as we enter February prices have extended losses by dropping through $150/ton .
• Iron ore has suffered a sharp turnaround as the demand outlook dims in China, which has pledged to cut back on steel output. In addition, mills' profit margins are taking a hit and port inventories are rising.
• In terms of the supply equation, flows from Australia's four big miners (Rio Tinto, Fortescue, BHP, Newcrest) rose in January, according to preliminary figures from UBS while in Brazil exports also rose. Vale is due to report its quarterly production figures after market today, and offer insights to its shipments outlook this year.
• Prices could be supported by weather conditions. In Australia has issued a severe weather warning for the Pilbara coast , the hub of the iron ore mining industry, which could disrupt shipments.