Iron ore futures in China edged up in early trade on Friday amid global supply worries after operations were suspended at a concentration plant in Brazil, but the steelmaking raw material was on track for its fourth consecutive weekly loss.
Brazil’s Vale SA, the world’s largest iron ore exporter, said it had to temporarily halt operations at the Viga concentration plant that is part of its newly-acquired Ferrous Resources do Brasil due to a permit problem, impacting some 330,000 tonnes of iron ore production a month.
But it said the suspension would not affect the Viga mine and that the operation permit issue was not related to a tailings dam.
The most-traded iron ore contract on the Dalian Commodity Exchange, with January 2020 expiry, rose as much as 1.2% to 633.50 yuan ($90.00) a tonne.
A deadly tailings dam collapse at Vale’s iron ore mine in Brumadinho in January prompted mine closures for safety checks in Brazil, disrupting supply and pushing spot prices of ores for delivery to No. 1 steelmaker China to five-year peaks.
But iron ore prices have pulled back in recent weeks amid signs that the supply crunch is easing, with Brazil’s iron shipments to China having risen recently.
Benchmark spot 62% iron ore for delivery to China SH-CCN-IRNOR62 was steady at $91.50 a tonne on Thursday, having rebounded from its lowest in more than four months, hit early this week.
The most-active September 2019 iron ore futures contract in Singapore was up as much as 1.2% at $87.45 a tonne in early trade on Friday.
Chinese steel futures extended their rallies amid hopes Beijing would roll out more measures to stimulate the slowing domestic economy.
The construction steel rebar benchmark on the Shanghai Futures Exchange was up as much as 0.9% at 3,732 yuan a tonne. Hot-rolled coil steel for car and home appliances manufacturing gained as much as 0.9% to 3,747 yuan a tonne.
Other steelmaking materials were also firmer, with Dalian coking coal up as much as 1.0% at 1,337.50 yuan a tonne and coke also rising as much as 1.0% to 1,997 yuan.
Source: Reuters
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