Iron Ore Surges as Cyclone Zelia Threatens Pilbara Supply

• Cyclone Zelia to make landfall near Port Hedland, a key iron ore export hub
• SGX iron ore futures hit 2025 highs as supply risks intensify

Summary

A severe tropical cyclone is bearing down on Australia’s Pilbara coastline, threatening to disrupt global iron ore supply. SGX futures are sitting at five-month highs as traders wait to assess the damage.

Big, Ugly, and Potentially Very Destructive

Based on the latest forecasts from Australia’s Bureau of Meteorology (BoM), Cyclone Zelia is expected to cross the Pilbara coastline later Friday as a category five system—the worst of the worst. It’s packing sustained winds near the eye of 205 kilometres per hour, with gusts up to 285 kilometres per hour.

The forecast track has Zelia making landfall east of Port Hedland, the world’s largest iron ore loading terminal. According to the latest figures, it shipped 568.7 million tonnes of iron ore last year—around a third of global seaborne supply. It’s a key hub.

Source: BoM

If Zelia crosses as forecast, severe flooding risks may be reduced due to wind direction and an expected ebb tide in the late afternoon. However, wind damage could be significant, and inland flooding remains highly unpredictable. Rainfall totals could reach hundreds of millimetres, potentially impacting key mining infrastructure.

SGX Iron Ore Testing Resistance Zone

Given the potential threat to supply, it’s no surprise SGX iron ore futures have surged to five-month highs. In such an environment, technical analysis may take a back seat, but it’s still useful to note key levels.

Source: TradingView

Bullish moves struggled between $108-109 in October, failing three times to sustain breaks following a sharp unwind beforehand. That puts emphasis on the latest push into this zone, especially as it coincides with uptrend resistance just above current levels.

There’s little visible resistance beyond until $114, where bullish moves stalled several times last year. On the downside, buying has been noted around $105.85 this week. The price action has been inconsistent around the 50 and 200-day moving averages recently, but they remain levels to watch, along with $102.25.

Momentum indicators are generating bullish signals, supporting a near-term upside bias.

-- Written by David Scutt

Follow David on Twitter @scutty