* Dalian iron ore drops 3.1%, but Singapore futures rebound
* Vale says suspended Malaysia ops to hurt Q1 iron ore sales
* Benchmark 62% iron ore’s spot price falls to 6-week low
By Enrico Dela Cruz
MANILA, March 24 (Reuters) - Chinese iron ore futures extended losses on Tuesday to slump to their lowest in three weeks, as worries about demand prospects fuelled by the coronavirus pandemic eclipsed rising chances of supply reductions.
The most-traded May iron ore contract on the Dalian Commodity Exchange fell 3.1% to 619 yuan ($87.43) a tonne in morning trade, marking its lowest since March 2. Futures prices on the Singapore Exchange, however, rebounded 3.7%.
Spot prices for the steelmaking raw material dropped to six-week lows on Monday amid the heavy sell-off in futures markets, with the benchmark 62% grade settling at $84.50 a tonne, the lowest since Feb. 10, as assessed by SteelHome consultancy. SH-CCN-IRNOR62
China’s iron ore and steel futures on Tuesday defied a recovery of industrial metals and equities, which rebounded following the scaling up of monetary and fiscal policy support for economies hammered by the pandemic.
“Investors are reassessing the effectiveness of the stimulus plans,” commodity strategists at ANZ said in a note.
However, they said Brazilian miner Vale SA’s move to suspend operations at its distribution facility in Malaysia “could potentially take some downward pressure off iron ore prices”.
Vale, one of China’s major iron ore suppliers, said on Monday it would halt operations at its Teluk Rubiah distribution terminal in Malaysia, which is expected to reduce sales in the first quarter by roughly 500,000 tonnes of iron ore.
The operations were scheduled to be suspended from Tuesday through March 31 to ensure safety of Vale’s workers amid the pandemic, but the miner said the move would not affect full-year 2020 production and sales.
* Construction steel rebar on the Shanghai Futures Exchange shed 0.9%, while hot-rolled coil, used in cars and home appliances, slipped 0.2% and stainless steel dropped 0.4%.
* Coking coal and coke both edged up 0.4%.
* Iron ore producer Rio Tinto has joined other miners across the world that are moving to slow down operations amid tighter restrictions to contain the epidemic.
* Global crude steel production rose 2.1% to 142.4 million tonnes in February from a year earlier, World Steel Association data showed on Monday, with China accounting for 53% of the total output.
($1 = 7.0803 yuan)
Reporting by Enrico dela Cruz; Editing by Aditya Soni