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Chinese iron ore prices gain for sixth day on Vale disruptions
CHINESE iron ore prices rose for a sixth straight session on Tuesday as Brazil's Vale faced further restrictions at its iron ore operations, adding to concerns about tight supply of the steelmaking raw material.
A Brazilian court on Monday ordered Vale, the world's largest iron ore miner, to halt operations at two more dams, adding pressure on the miner to prove that its remaining dams are safe.
Analysts expect restrictions at Vale's operations following January's deadly dam collapse that killed some 300 people will reduce its iron ore output by 64 million to 83 million tonnes on an annual basis.
"Iron ore prices will continue to stay strong, driven by both supply disruption and firm demand," analysts from CITIC Futures said in a note in Mandarin.
"Steel mills in China are expected to replenish their stocks as their inventory has fallen to a low level," they added.
Vale, meanwhile, said that it is now able to resume iron ore shipping operations at the Ilha Guaiba port terminal in Rio de Janeiro state, from where it ships around 40 million tonnes of iron ore per year.
Brazil's iron ore shipments for the first two weeks of March averaged 1.29 million tonnes per day, below 1.44 million tonnes in February and 1.42 million tonnes in March last year, according to trade ministry data.
The most-traded iron ore contract for May delivery on the Dalian Commodity Exchange closed up 0.2 per cent at 636 yuan (S$128) a tonne.
Prices of rebar, a construction steel product widely used in the property and infrastructure sectors, rose as Beijing vowed to speed up construction project approvals to push for growth.
It closed 0.3 per cent higher to 3,788 yuan a tonne.
Manufacturing-grade steel hot- rolled coil stayed little changed at 3,699 yuan.
Other steel-making raw materials fell on Monday, curbed by weak demand as steel mills were ordered by local governments to trim output.
Coking coal prices dipped 0.5 per cent to 1,277.5 yuan, while coke futures lost 1.1 per cent to 1,964 yuan. REUTERS