Iron ore futures in China touched their highest in more than eight months on Monday after miner Vale SA cut its production outlook because of the coronavirus outbreak.
The Brazilian company said it had reduced its forecast for annual output of iron ore fines to between 310 million and 330 million tonnes, from 340 million to 355 million tonnes previously, and pellet production to between 35 million and 40 million tonnes, down from 44 million tonnes.
The most active iron ore futures contract on the Dalian Commodity Exchange, for September delivery, jumped as much as 1.7% to 624 yuan ($88.18) a tonne. It closed 1.1% up at 620 yuan, its highest since Aug. 2.
Spot prices of iron ore with 62% iron content for delivery to China gained by $0.50 to $87 a tonne on Friday.
Another big gain in early trade was marked by Shanghai stainless steel futures, surging as much as 4.4% to 13,390 yuan a tonne, tracking nickel prices that rose on concern over tightness in ore supply.
Nickel ore at 14 Chinese ports as of April 10 fell to the lowest levels since June 2018 at 9.46 million wet tonnes, according to latest Antaike data updated by Refinitiv Eikon.
The June contract ended 3.8% up at 13,320 yuan a tonne.
Other steel futures on the Shanghai Futures Exchange slipped, with construction rebar for October delivery dropping 1.1% to 3,362 yuan a tonne and hot-rolled coil down 0.8% at o 3,218 yuan.
FUNDAMENTALS
* Dalian coking coal eased by 0.04% to 1,132 yuan a tonne.
* Dalian coke rose 0.7% to 1,709 yuan a tonne.
* More than 2.38 million people have been reported to be infected by the novel coronavirus globally, with 164,918 deaths, according to a Reuters tally.
* Tokyo Steel Manufacturing Co, Japan’s top electric-arc furnace steelmaker, on Monday said that it will keep steel product prices steady in May despite the coronavirus-related slump in demand from the automobile and construction industries.
* China cut its benchmark lending rate on Monday to reduce borrowing costs for companies and prop up the coronavirus-hit economy after its first contraction in decades.
* Total net profit at enterprises owned by China’s central government plunged 58.8% year on year during the first three months of 2020, the state assets regulator said on Monday.
* China’s first-quarter revenue fell 14.3% from a year earlier to 4.598 trillion yuan ($649.75 billion), the finance ministry said on Monday, attributing the decline to the coronavirus outbreak and tax relief.
Source:Reuters
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