Iron ore futures in China, the world’s top consumer of the steelmaking raw material, and in Singapore edged down on Monday after miner Vale SA got approval to resume activities at a major mine in Brazil.
Dalian Commodity Exchange’s most-traded iron ore, for delivery in January 2020, ended down 1.2% at 615 yuan ($87.56) a tonne, its weakest finish since Oct. 22.
On the Singapore Exchange, the most-active November contract was down 1.9% at $82.60 a tonne in afternoon trade.
Vale, the world’s largest iron ore miner, said on Friday that Brazilian regulator ANM had allowed it to resume its Alegria mine operations, which were interrupted last March after a “stress test” failed to guarantee its stability.
The company said the resumption of mining activities at Alegria will allow it to restore 8 million tonnes of 50 million tonnes in capacity lost after the collapse of its Brumadinho dam in January caused a series of shutdowns.
Tight supply concerns in the aftermath of the Vale dam burst and dam shutdowns for safety checks, along with operational issues that also hit miners in Australia, had pushed iron ore prices up until July to five-year peaks.
Prices have since pulled back as supply has started normalising, with imported iron ore inventory at Chinese ports scaling a six-month high in late October.
Benchmark spot 62% iron ore, which slumped to its lowest in more than seven months last week at $85 a tonne, based on SteelHome consultancy data, may average $90 this quarter and drop to $70 next year, said Andrew Driscoll, head of resources research at CLSA.
* Brazil’s iron ore exports in October reached 31.2 million tonnes, compared with 27.14 million tonnes the month before.
* Imported iron ore inventory at China’s ports dropped to 131.65 million tonnes as of Nov. 1, from 134.1 million tonnes a week ago, falling for this first time after rising steadily for five straight weeks from Sept. 20, latest SteelHome data showed.
* The most-traded construction steel rebar on the Shanghai Futures Exchange closed up 0.5%, while hot-rolled steel coil, used in cars and home appliances, inched up 0.2%.
* Shanghai stainless steel ticked 0.4% higher.
* Dalian coking coal fell 1% and Dalian coke edged down 0.3%.
* Imported coking coal stocks at five major Chinese ports covered by Mysteel consultancy’s weekly survey eased 1% or 90,000 tonnes on week, from its three-year high to 7.6 million tonnes as of Oct. 31.