Iron ore gains on supply woes - ING

Iron ore has jumped to the highest level since October 2024 with prices approaching $108/t this morning as a tropical cyclone in Australia raised concerns about supply disruptions. 

Demand from China remains steady

"Cyclone Zelia is expected to grow stronger as it heads towards Australia's Pilbara region and is forecast to hit near Port Hedland. Port authorities said they would close all operations this evening, clearing all berths. Pilbara has experienced above-average rainfall in recent months which has already impacted the miner's first-quarter production levels."

"The latest report from the Philippine Nickel Industry Association suggests that the country's nickel ore output could increase by 10-15% in 2025, after a fall seen last year. Demand for nickel ore has been strong from Indonesia as domestic smelters face ore shortages due to government licensing issues. Meanwhile, demand from China also remains steady. However, lawmakers in the Philippines have filed a bill to ban/limit raw mineral exports to support the downstream industry, which might keep nickel ore supplies tight."

"The latest LME COTR report shows that investors increased their net bullish position in copper by 5,224 lots for a sixth consecutive week to 73,763 lots for the week ending 7 February, the highest net long since 1 November 2024. A similar move has been seen in aluminium, with speculators increasing their net bullish bets by 2,109 lots to 119,588 lots over the last reporting week. This was the highest bullish bet since the week ending 15 November 2024. For zinc, money managers increased net bullish bets by 2,992 lots after declining for two consecutive weeks to 28,167 lots as of last Friday."