Last year saw dramatic movements in raw material prices. Most of the outlooks issued at the end of 2018 for the year ahead proved to be wrong, as is often the case. During the year, a number of unexpected events fuelled high volatility in iron ore and scrap prices globally, indicating that 2020 is also set to be difficult to predict.

In 2019 62% Fe iron ore prices averaged over $100/tonne cfr Qingdao according to the Kallanish KORE index. This was up by $30/t on the 2018 average, and confirms that medium-term forecasts for iron ore prices are difficult to make. At the end of 2018 some of the most important outlooks for iron ore prices indicated that the average price in 2019 would be below that in 2018. Among others the view was shared by the Australian Department of Industry as well as Citigroup Bank.

The reality proved to be very different indeed during 2019. The year began with the accident at the Brumadinho dam in Brazil which fuelled a price recovery that meant spot prices almost doubled from beginning of December 2018 to July 2019. Apart from the availability issues created by the accident, Chinese demand remained stronger than anticipated during the year, supporting the iron ore price well beyond that expected.