The spot price of iron ore on the world market has risen above $137 per tonne. At the beginning of November last year, it cost $50 less.
Two key factors are behind the rise in iron ore prices. The first is rising demand in China, driven by a construction boom, and the second is concerns about supply disruptions from Australia. The smallest continent is the world’s largest exporter of this strategic raw material.
Iron ore mining in Australia could be affected by the rise of the coronavirus variant omicron and the subsequent tightening of anti-epidemic measures. Australia covers about 70 per cent of China’s iron ore imports. And so the ore is becoming more expensive. Its price has risen 58 per cent since the beginning of November last year to more than $137 a tonne today.
Meanwhile, Australian iron ore exports are already likely to fall during January. Analyst firm Refinitiv estimates that January iron ore exports from Australia will fall by about six million tonnes compared to December to around 74 million. However, it will still be around six million tonnes higher than in November and three million higher than in October. However, Australians are optimistic and believe the omicron wave will be short-lived.