China iron ore climbs after BHP halts west Australian rail operations
MANILA, Nov 6 (Reuters) - Chinese iron ore futures rose 1 percent on Tuesday, supported by concerns over tighter supply after BHP Billiton suspended all its iron ore rail operations in Western Australia after a runaway train incident.
The world’s No. 3 iron ore supplier made the decision after after a train, loaded with iron ore, at BHP’s Mount Newman railway line ran away at high speed for nearly 100 km (62 miles) before being forcibly derailed.
BHP has four processing hubs and five mines in the Pilbara region of northern Western Australia, connected by more than 1,000 km of rail infrastructure and port facilities.
The most-traded January iron ore on the Dalian Commodity Exchange was up 1 percent at 515.50 yuan ($74) a tonne by the midday break.
BHP did not say how long the iron ore rail operations will be suspended, but ANZ analysts say the miner “does have a substantial stockpile at the port that it will be able to utilise.”
“We expect this incident will lead to the rebound in iron ore prices, which are also already well supported by declining port inventory in China,” said Argonaut Securities analyst Helen Lau.
Stocks of iron ore at China’s major ports stood at 141.65 million tonnes on Nov. 2, nearly 13 percent below a record high in early June, data tracked by SteelHome consultancy showed. SH-TOT-IRONINV
