The iron ore price has risen to over US$102 per tonne, as disruption in Brazil continues to disrupt supply. 

To date in 2020 iron ore has had a surprisingly good run, as Chinese steel manufacturing facilities simply proved too complex and too big to shut down during the coronavirus crisis. That meant demand for iron ore remained stronger than demand for other commodities, and meant in turn that the economic consequences for any mining companies that have been able to keep their production going have been generally favourable. 

That’s not been the case in Brazil though, where President Bolsonaro’s pugnacious stand against the global coronavirus consensus has been challenged on several levels inside the country. On 8 June, for example, a Brazilian judge ordered the closure of three major iron ore mines owned by the Brazilian mining champion Vale (NYSE:VALE) after nearly 200 workers tested positive for the virus. 

That news led Chinese iron ore futures to post their sharpest one day gain since July 2019.  

Notwithstanding that Chinese steel mills were never actually shut down, there’s also the new factor of the major stimulus package that the Chinese government has introduced.  

This has pumped even more cash into the construction and infrastructure sectors there, in turn fueling greater demand for iron ore, as well as for other associated commodities like chrome and ferrochrome. 

This in turn has helped some of the major miners and a few of the smaller ones too. BHP Group (LON:BHP) has now recovered most of the ground lost during the coronavirus crisis, as has Rio Tinto (LON:RIO).Both are currently trading at or around three month highs. 

Also benefitting are some of the smaller iron ore companies, like Alien Metals (LON:UFO), which has seen interest in its iron ore tenements in Australia rise.  

Tharisa (LON:THS), a producer of chrome in South Africa, is also at a three month high, as investors weigha certain amount of production shortfall due to lockdown against rising commodity prices.