* Supply disruptions loom amid virus containment lockdowns
* Lockdowns could affect 80 mln t of iron ore supply -ING (Updates with additional analyst comment, closing prices)
By Enrico Dela Cruz
MANILA, March 26 (Reuters) - Chinese iron ore futures edged higher on Thursday on supply concerns as coronavirus-containment measures across the world intensified, but the uncertain demand outlook for the steelmaking raw material and steel products capped gains.
The most-traded May iron ore contract on the Dalian Commodity Exchange ended up 0.7% at 662 yuan ($93.40) a tonne.
Supply concerns also supported spot prices. The benchmark 62% iron ore bound for China, the biggest buyer of the raw material and which accounts for more than half of the world’s steel output, was well above $80 a tonne.
“Prices (are) trading above US$80/T level, comfortably supported by expectations of a potential supply deficit in 2020 as many major producing countries announce complete lockdowns,” commodity strategists at ING wrote in a note.
“It is estimated that approximately 80mt (million tonnes) of iron ore supply could be impacted due to border controls and lockdowns.”
Iron ore exporters Australia, India, Canada and South Africa have all imposed pandemic containment measures, while Brazilian iron ore miner Vale SA has suspended operations at its distribution facility in Malaysia.
The front-month April iron ore contract on the Singapore Exchange, however, fell 1.4% in afternoon trade on doubts over the effectiveness of the United States’ massive stimulus package to curb the pandemic’s economic impact.
“It is impossible to look at the still-unpassed stimulus bill in the U.S. and conclude that the time is ripe for piling into risk assets, simply because the other unknown, the virus, is still accelerating,” said Robert Carnell, ING head of research for Asia Pacific.
* In mainland China, where the coronavirus outbreak began, no new local cases were reported for a second consecutive day, but fears of a resurgence of transmissions lingered due to the rising number of imported infections.
* Construction steel rebar on the Shanghai Futures Exchange was up 0.1%, while hot-rolled steel coil, used in cars and home appliances, dropped 0.9%.
* Stainless steel climbed 0.3%.
* Coking coal and coke both slipped 0.5%.
* Spot 62% iron ore rose to $87 a tonne on Wednesday, from Tuesday’s $84.70, based on data from SteelHome consultancy. SH-CCN-IRNOR62
($1 = 7.0877 yuan)
Reporting by Enrico dela Cruz; Editing by Amy Caren Daniel & Aditya Soni