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Beijing – China’s iron ore futures ended higher on Friday, but still recorded the biggest weekly loss in 20 weeks, as continued price correction dragged amid increased supplies from Australia and Brazil.
The most active iron ore futures on the Dalian Commodity Exchange lost 5.1 percent this week, marking their worst performance since November 30, 2018.
It closed 0.2 percent higher at 621.5 yuan ($92.70) a tonne.
“Market sentiment remains weak and disturbed by the news of shipment disruption in Australia and resumption of Vale’s Brucutu mine,” said analysts from Orient Futures in a note.
The Brazilian miner, on Tuesday night, said it will reopen its biggest iron ore mine in Minas Gerais, with an annual capacity of 30 million tonnes.
Vale is also continuing to ramp up the output of S11D operations in northern Brazil, which could produce up to 80 million tonnes in 2019. S11D is a low-cost, high-grade iron ore project.
A tropical cyclone hit Western Australia in late March, causing operation disruptions and port damages that would affect some 25 million tonnes of iron ore production
However, analysts expect the price correction to not sustain as iron ore supply conditions remain tight in the short term.
A tropical cyclone hit Western Australia in late March, causing operation disruptions and port damages that would affect some 25 million tonnes of iron ore production, according to Fitch Ratings.
The ratings agency expects some of the supply tightness and market dislocation to be transitory, the gap of lost production to narrow, and the price of iron ore to soften in second half of 2019.
Benchmark construction rebar stayed little changed at 3,738 yuan, as the market still worried about the sustainability of firm demand. It fell 1.7 percent during the week, the steepest loss in 9 months.
Dalian coking coal futures rose 1.2 percent to 1,336.5 yuan, while coke prices advanced 1.1 percent to 2,050 yuan. ($1 = 6.7046 Chinese yuan)
(Reporting by Muyu Xu and Dominique Patton; Editing by Uttaresh.V)
