Futures of iron ore advanced this Tuesday after the mining company Vale (VALE3) have informed the suspension of the operations of a concentration plant in the Brazil, although negotiations have moved low due to the proximity of the National Day holiday in China, from October 1 to 8.
The most negotiated contract for the material used in the manufacture of steel, for delivery in January 2021, advanced 1.4% on the Dalian exchange, closing at 780.50 yuan (114.47 dollars) per ton, in the second session followed by high .
Iron ore for delivery in October on the Singapore stock exchange rose 1.1% in the afternoon, in the fourth earnings session.
The suspension of operations at Vale’s Viga concentration plant occurred after a court decision and will reduce the company’s iron ore fines production by 11 thousand tons per day.
“The supply interruption could provide short-term support for the market, which fell after six-year highs played earlier this month,” said ING commodity strategists in a note.
Iron ore is also supported by China’s demand for steel, particularly in the construction sector, which has been driven by government stimulus measures focused on infrastructure.
“We anticipate that Chinese demand for construction steel, particularly for rebar, will remain seasonally robust in October and November,” said analysts at the Navigate Commodities analyst house in Singapore.
Steel rebar on the Shanghai stock exchange closed up 0.1%.