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May 20, 2020, 11:46 a.m. EDT

Brazil’s deadly coronavirus outbreak disrupts iron-ore market

The coronavirus crisis has pushed the price of the steel ingredient to a seven-month high

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By Joe Wallace

Getty Images
Citic Pacific Mining's Sino Iron magnetite iron ore project in the Pilbara region of Western Australia, who dominates the iron-ore mining industry along with Brazil.

Brazil’s deadly coronavirus outbreak has disrupted global supplies of iron ore just as demand from China is revving up, pushing the price of the steel ingredient to a seven-month high.

Iron ore is one of the most heavily traded commodities and can influence the price of materials used in everything from buildings to cars. Front-month futures for ore with 62% iron content jumped 10% to nearly ¥759 ($107) a metric ton Wednesday on China’s Dalian Commodity Exchange. That is their highest closing price since October 2019.

Prices have risen 20% since early April, driven by squeezed supplies from Brazil, which dominates the iron-ore mining industry along with Australia. The rally is also an indication that China’s economy is gathering momentum, after a downturn at the start of the year when swaths of the country went into lockdown to stop the coronavirus spreading.

The iron-ore market has been remarkably robust, said John Meyer, head of research at SP Angel, a brokerage for small mining companies in London. “The steel producers in China, they slowed things down during lockdown but have been pretty quick in getting back up to production.”

An expanded version of this story appears on WSJ.com

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