Iron ore hits one-week high as Rio Tinto suspends work at Guinea mine

BEIJING: Prices of iron ore futures rose to a one-week high on Monday as Rio Tinto suspended activity at its Simandou project in Guinea following an incident, raising fears of a potential delay in production start at the mine.

The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) was 1.56% higher at 781.5 yuan ($109.07) a metric ton, as of 0204 GMT.

The contract hit its highest since August 14 at 788 yuan earlier in the session.

The benchmark September iron ore on the Singapore Exchange was up 1.5% at $102.1 a ton, as of 0154 GMT, after touching the highest since August 18 at $102.95 earlier.

Rio Tinto, the world’s largest iron ore miner, said on Saturday it had suspend activities at Guinea’s SimFer mine site after an incident there left a contract worker dead.

The miner, which owns two of the four Simandou mining blocks as part of its SimFer joint venture with China’s Chalco Iron Ore Holdings (CIOH) and the Guinea government, had earlier expected first iron ore shipment in November.

Supporting prices of the key steelmaking ingredient, near-term demand remained firm despite production restrictions on mills in top Chinese steelmaking hub Tangshan to ensure clean air in Beijing ahead of a military parade to commemorate the end of World War Two.

Average daily hot metal output, a gauge of iron ore demand, held steady at 2.41 million tons in the week to August 21, data from consultancy Mysteel showed.

Other steelmaking ingredients on the DCE gained, with coking coal and coke up 4.47% and 3.46%, respectively. Steel benchmarks on the Shanghai Futures Exchange advanced on higher raw materials costs.

Rebar gained 0.58%, hot-rolled coil rose 0.83%, wire rod climbed 0.54% and stainless steel ticked up 0.39%.