This article was prepared by Macquarie's Commodities Strategists for LME Week 2019.
24 October 2019
Seaborne iron ore delivered one of the strongest performances in our commodity cover this year, characterised by a surprisingly robust steel demand growth in China, technical industry issues in Australia and a dam failure in Brazil. Making iron ore’s performance completely at odds to the surplus-hit coal prices and the aggressive macro-cap on industrial metal prices.
We estimate that 3-5 per cent of seaborne supply was lost among the big three miners – Vale, Rio Tinto and BHP. This shortfall was partly offset by a supply lift in China, and among small producers across Australia and Brazil. But a seaborne deficit persisted well into 2H19, underpinning the year's collection of high product prices.