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Pandemic-resistant: Australian iron ore mining hits all-time-high

The 2020 was a bad year for many of Australia’s top export commodities, as the lockdowns implemented globally crippled business operations and deteriorating trade relations with China caused export duties to rise dramatically. However, iron ore was one commodity that shrugged off the impact of the coronavirus pandemic quickly and while its prices recorded an unprecedented growth, it became Australia’s most valuable export commodity in 2020.

Benefiting from buoyant Chinese demand and exploiting the global supply gap, Australia’s iron industry proved to be pandemic-resistant and reached its all-time-high in annual export earnings. A stellar run of iron ore prices provided a windfall to Australian mining companies. Overall, Australia’s iron ore majors increased their export volumes by 16%, outperforming the top iron ore-supplying nations.

Iron ore started 2021 in much the same fashion as it spent most of last year, with strong iron ore prices continuing to support the Australian Federal Budget and the mining giants’ businesses. However, with early signs of supply recovery from the top global exporters, including Brazil and South Africa, and softening Chinese steel output, the fundamentals are slowly starting to turn against further iron gains and easing of prices seems a very likely scenario.