China iron ore hits over two-week low as Vale ramps up output
MANILA (Reuters) - Iron ore futures in China, the world’s top buyer of the steelmaking raw material, hit a nearly three-week low on Tuesday after Brazilian miner Vale SA reported higher output in the third quarter.
Concerns about iron ore demand slowing in China, which makes about half of the world’s steel output, due to its renewed efforts to curb pollution by restricting steel mills operations in some areas also weighed on prices.
Dalian Commodity Exchange’s most-traded iron ore contract ended down 1.2% at 644 yuan ($91.05) a tonne, after falling as much as 3.3% earlier in the session to its weakest since Sept. 26.
Vale, the world’s top iron ore exporter and China’s major source of high-grade material, on Monday reported a 35.4%quarter-on-quarter jump in output to 86.7 million tonnes in the July-September period.
A deadly tailings dam burst at Vale’s Brumadinho complex in January prompted several dam and mine shutdowns for safety checks, tightening global supply and pushing iron ore prices to five-year peaks.
Spot 62% iron ore benchmark, which was steady at $92.50 a tonne on Monday, is still up 15% this year despite a 27% slump from its July 3 peak of $126.50 amid easing supply concerns, based on SteelHome consultancy data.
Improving iron ore supply from Brazil and Australia has pushed port inventory in China to a five-month high of 129.95 million tonnes, latest SteelHome estimates showed.
That improvement was reflected in China’s iron ore imports, which rose for a third straight month in September to a 20-month high, according to customs data released on Monday.
