Iron Ore prices spike as Brazil COVID-19 cases grow

It would appear as though the bull run in Iron Ore will be continuing for now. As the prospect of a second wave looms ever present, and the number of cases increasing in some locations by virtue of easing social distancing restrictions, the COVID-19 pandemic continues to influence global geopolitics. Cases in Brazil are spiking, and that has resulted in further concern of supply constraints.

Trading Economics recorded a top price of $US108.96 per tonne as coronavirus cases in Brazil continue to climb, triggering fears of supply disruptions as demand from China recovers.

We know the price of Iron Ore has been on a tear, having breached resistance (green) and creating a new level of support (red), and being above the WMA:

https://www.tradingview.com/x/8O3Ju3BS/

It appears likely that this bull run will continue given the technical indicators, and when one combines that with factors such as supply constraints in Brazil, and the negative trade talk between China and Australia, the argument is reinforced. Many pundits believe that China will not implement any tariffs/quotas on Australian Iron Ore because they are dependant on it, but this flies directly in the face of evidence to the contrary showing activities such as China searching for alternate sources of Iron Ore in Africa. China has also made a trade deal with Iran demonstrating clearly that they are willing to pursue policies in direct opposition to prevailing western political sentiment, and they do not feel any obligation to be accommodating.

One can not predict the future, but this still appears bullish for Iron Ore. A good investment in such a situation would be in a near producing Iron Ore asset with an ultra-high grade deposit, good economics, and surrounded by producing Iron Ore mines. Black Iron Inc (TSX:BKI) is one such place, and an extremely cheap stock. The price has gone up 50% since this report, and this could easily go a lot higher. It just seems to be going up and up. LINK TO REPORT.

 

Iron ore prices spike again as Brazilian coronavirus cases grow

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