Iron ore prices are up again as fresh news of further Brazilian production cuts filter through the market. As per Business Insider, Benchmark 62% fines are now at their highest level in a month after gaining 2% to trade at $88.26.
Meanwhile, 58% fines are now sitting at a level not seen since September 2014, following a modest gain of .2% to trade at $70.49.
65% fines also gained .5% to trade at $98.
Picking the overall trend here is tricky as each bit of news out of Brazil has shifted the market, despite the various factors internal to China.
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Further production cuts impacting iron ore price
As Reuters reports, Vale SA said on Saturday that it would be cutting production at a mine in Minas Gerais that has an annual capacity of 12.8 million tonnes.
This is in addition to the temporary closure of a number of other mines which is expected to impact 70 million tonnes a year of capacity.
The new number is close to 83 million tonnes of expected capacity and 5.7% of the seaborne market, according to analysts from Jefferies.
Meanwhile utilisation rates at steel mills declined again last week, hitting 62.29% as of 15 March, Reuters reports via Mysteel.
Iron ore miners currently benefitting from news out of Brazil
Rio and BHP are near 52-week highs, and FMG continues to scale new heights.
Previously, we have suggested that ongoing pollution issues could benefit 65% fines in the long run, meaning that companies pushing higher grades may see a more sustained run.
We have also suggested that for this reason Mount Gibson Iron Ltd [ASX:MGX] may continue to outperform.
Here is a snapshot of their Koolan Island site, which the company is targeting first ore sales from at the end of this month:
In our next iron ore update, we will look at another smaller iron ore miner that could follow a similar path to Mount Gibson Iron.
For Money Morning