Iron Market Update (January 24, 2013)

Iron ore prices have slipped to around $146 per metric ton (MT), down from a three-month high of $158.50 on January 8. But despite that decline, iron ore is still well above the $86.70 it hit in early September — a three-year low.

Prices have recently found support due to concerns that Australia’s cyclone season, which runs from November through April, could halt shipments and cut iron ore inventories. In all, the country’s Pilbara region accounts for 40 percent of the world’s annual iron ore exports.

This week, Cyclone Peta, which formed off the country’s northwest coast, shuttered a number of ports, including Port Hedland, through which producers BHP Billiton (NYSE:BHP,ASX:BHP,LSE:BLT), Fortescue Metals Group (ASX:FMG) and others ship roughly 200 million MT of iron ore a year. Rio Tinto (NYSE:RIO,ASX:RIO,LSE:RIO) also reported that Cape Lambert and Dampier Port, through which it exports 200 million MT a year, are closed as well.

However, the storm is now showing signs of weakening, and that has allowed Port Hedland to reopen. The other facilities are also expected to resume loading vessels soon.

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