April 2, 2019 / 8:08 AM / 3 months ago

UPDATE 1-China's iron ore futures scale new peak near $100/T

* Dalian iron ore hits intraday record high 665.5 yuan/T

* BHP sees iron ore output cut by 6-8 mln T after cyclone

* Vale fails to obtain stability certificates for 13 dams

* China’s top 2 steelmaking cities to extend output curbs (Updates with closing prices, more comments, graphic)

By Enrico Dela Cruz

MANILA, April 2 (Reuters) - China’s iron ore futures jumped to a fresh record on Tuesday following more news that supported a tight supply outlook, with BHP saying it expects lower output of the steelmaking raw material due to disruption and damage caused by a cyclone.

BHP Group Ltd, the world’s biggest miner, said initial estimates indicated its iron ore production would take a hit of about 6-8 million tonnes after cyclone Veronica affected its operations last week.

BHP’s production guidance followed news that Brazilian miner Vale SA, the world’s top iron ore supplier, failed to obtain stability certificates for 13 dams under review following the rupture of another dam in January that killed hundreds.

The May 2019 iron ore contract, the most traded on the Dalian Commodity Exchange, rose as much as 4.2 percent to 665.5 yuan ($99.08) a tonne, the loftiest since China launched its iron ore futures in 2013. It ended at 662.5 yuan a tonne, up 3.8 percent at its highest close ever.

Iron ore demand of Chinese steel mills is likely to lend support to prices, INTL FCStone commodity consultant Edward Meir said.

“We think prices will retain a firm tone...as we think Chinese steel mill activity should start to pick up, especially towards month-end,” he said.

Rio Tinto, the world’s No. 2 iron ore miner, on Monday cut its 2019 outlook for shipments from Australia’s Pilbara region due to production disruption and damage caused by cyclone Veronica.

Last week, Vale said it would likely sell up to 75 million tonnes less iron ore this year, after several mines were halted following its second deadly dam burst in less than four years.

Fortescue, the world’s No. 4 iron ore miner, said on March 25 it expected 1.5 million to 2 million tonnes of shipments to be delayed also due to disruption caused by a cyclone.

China’s iron ore imports likely declined again in March, after hitting a 10-month low in February, with demand tempered, Meir said. But he ruled out a scramble for supply as inventory at Chinese ports stood at six-month highs.

“Chinese steel mills, especially in the north, are expected to keep production restrained given that pollution readings remain elevated,” he said.

Steel prices rose after Reuters reported late on Monday that steel mills in the two biggest steelmaking cities in China - Tangshan and Handan - will be required to continue production restrictions in the second quarter to improve air quality.

The most-active rebar contract on the Shanghai Futures Exchange climbed 1.6 percent to 3,838 yuan a tonne, extending gains for a third straight session to its highest close since Feb. 11 this year. Hot rolled coil edged up 0.5 percent to 3,771 yuan.

Coking coal ended 0.4 percent lower at 1,237.5 yuan a tonne while coke inched up 0.3 percent to 2,004.5 yuan.

($1 = 6.7169 Chinese yuan)

Reporting by Enrico dela Cruz; Editing by Rashmi Aich

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below