China iron ore extends rally, hot-rolled steel coil hits record peak
MANILA, Jan 20 (Reuters) - Chinese iron ore futures rose on Monday, extending last week’s gains, fuelled by concerns over supply of the steelmaking raw material and an improved outlook for steel demand, but lighter trade is expected as the Lunar New Year break approaches.
The Dalian Commodity Exchange’s most-traded iron ore contract, expiring in May, rose 1.3% to 675 yuan ($98.41) a tonne, its highest since Jan. 9.
Supply issues have also pushed spot iron prices higher, with the benchmark 62% iron-content ore at $96.70 a tonne as of Jan. 17, the strongest since Sept. 17 last year, data from SteelHome consultancy showed. SH-CCN-IRNOR62
Imported iron ore stocked at China’s ports fell for three weeks in a row, hitting 127.35 million tonnes on Friday, the lowest since the last week of September 2019, SteelHome data also showed. SH-TOT-IRONINV
Adding to supply concerns, Brazil’s Vale SA has halted tailings operations at its Esperança mine, citing the need to do a technical evaluation and potentially carry out work to improve safety at the site.
Vale, the world’s largest iron ore miner, said in December it would slash output from its Brucutu mine for up to two months while it evaluates the stability of a nearby dam, prompting it to lower its output guidance for the first quarter of 2020.
