China’s Dalian iron ore futures plunged on Wednesday as Brazilian iron ore miner Vale SA is set to resume operations at the Brucutu mine, although its Australian rivals cut their production guidance for the year.
The most-traded iron ore futures for September delivery on the Dalian commodity Exchange sank as much as 4.7 percent shortly after market opened. It was down 3.2 percent to 625 yuan ($93.15) a tonne as of 0129 GMT.
Market expects a relaxing supply as Vale said in a securities filing late on Tuesday that it would resume operations at its largest iron ore mine in Minas Gerais state within 72 hours.
The mine, with annual capacity of 30 million tonnes, has remained shut since early February after a tailings dam burst in late January, killing hundreds of people.
“We have already seen shipment volume for iron ore from Australia and Brazil increasing in the past two weeks, which adds pressure on prices,” said analysts from CITIC Futures in a note in Mandarin.
But they also said that demand from Chinese mills remains firm in April as winter restrictions in northern China have eased.
Inventory of imported iron ore at Chinese ports stood at 148.9 million tonnes as of April 12, data compiled by SteelHome showed.
Meanwhile, major iron ore miners in Australia, BHP Group and Rio Tinto, cut their iron ore production outlooks for this year after a tropical cyclone hit Western Australia in March.
BHP lowered its production forecast to 265-270 million tonnes from 273-283 million tonnes, while Rio Tinto cut its estimate to 333-343 million tonnes from 338-350 million tonnes.
Benchmark Shanghai rebar prices edged down 0.4 percent to 3,787 yuan a tonne on as investors awaited the first- quarter GDP data.
Other steel-making raw materials stayed little changed, with coking coal prices at 1,319.5 yuan and coke at 2,050 yuan.
Source:Reuters
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