China produced a record 1.05 billion tonnes of steel in 2020, helping to drive spot iron ore prices to a one-year peak of $175.40 a tonne on Dec. 21. Over the year, prices rose 75%.

The spot price of benchmark 62% iron ore delivered to North China, as assessed by price reporting agency Argus, has since retreated back below $160 a tonne.

But the price has been above $150 for almost two months, which is a strong performance considering that the steel-making ingredient held below $100 for the five years between May 2014 and May 2019.

While China’s record steel output has played its role, global iron ore supply has also been hit by a series of issues in second-largest exporter Brazil, which has suffered disruptions from the coronavirus pandemic, mine closures on safety grounds and a fire last month at an export terminal.

Top exporter Australia has managed to keep its shipments at robust levels, but this hasn’t been enough to offset the supply losses from Brazil and still meet China’s demand.