MANILA (Reuters) – Iron ore futures advanced on Tuesday after mining company Vale (VALE3) informed the suspension of operations at a concentration plant in Brazil, although negotiations have moved in low volume due to the upcoming Christmas holiday. National Day in China, October 1-8.
The most negotiated contract for the material used in steelmaking, for delivery in January 2021, advanced 1.4% on the Dalian exchange, closing at 780.50 yuan (US $ 114.47) 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%.
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