Severe weather blows iron ore higher Torrential rain and high winds affecting the two main exporters of iron ore have lifted the price of the steelmaking commodity to its highest since November. Port Hedland in Australia, the world's most important port for iron ore exports, has been closed due to cyclone Heidi. In Brazil, Vale, the world's top exporter of iron ore, has had to walk away from some shipments because of heavy rain. Together the two countries account for 70 per cent of global iron ore trade. Benchmark Australian iron ore - with 62 per cent iron content - has risen to a seven-week high of $143.50 a tonne due to the disruption, according to data from Platts, the price reporting agency. It is up 22.5 per cent from a low in October as steel mills have returned to the market following a collapse in prices. The price of iron ore is critical to the global economy as it feeds into the price of steel and ultimately everyday goods. It is also important to two of the largest heavy industries, mining and steelmaking, and affects the profitability of miners such as BHP Billiton, Rio Tinto and Vale, and steelmakers like ArcelorMittal, ThyssenKrupp and China's Baosteel. The rally in iron ore comes in spite of widespread investor concern about the country's economic growth. However, analysts say that the rise in prices has been driven primarily by supply concerns. Vale, the world's largest exporter of iron ore, has estimated it could lose up to 2m tonnes of the mineral following weeks of rain in Brazil's key south-east region. On Wednesday night, the Brazilian company officially declared "force majeure" on the shipments, which are equivalent to nearly 1 per cent of the company's annual output. States such as Minas Gerais, the source of more than half of Vale's iron ore output, have been hit by high rainfall since the middle of December, slowing down operations and increasing the risk of accidents and mudslides at open pit mines. José Carlos Martins, Vale's executive director for iron ore and strategy, said: "The effect was very concentrated in this time period but we expect that we will be able to recoup a good part of this loss over the year." Goldman Sachs analyst Marcelo Aguiar estimated that iron ore prices would have to increase by about $10 per tonne to "compensate for Vale's lower volumes and higher costs." In Australia, three ports accounting for 94 per cent of the country's iron ore exports were closed due to the cyclone, according to Macquarie, the Australian bank. Further shutdowns were likely during the first three months of the year as the country went through its rainy season, the bank said. "We expect to see the iron ore price trend up during the first quarter," said Colin Hamilton, analyst at Macquarie. We would however acknowledge that no pick-up at all in end user steel demand in China would keep iron ore subdued in its current range.