BEIJING: China's iron ore futures fell on Friday, on course for 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 5.2 percent this week, posting their worst performance since November 30, 2018.
It was down 0.3 percent to 618 yuan ($92.19) a tonne as of 0151 GMT.
"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.
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 also fell on Friday, as market worried about the sustainability of firm demand. It slid 0.6 percent to 3,715 yuan a tonne.
Dalian coking coal futures stayed little changed, while coke prices edged down 0.2 percent to 2,024.5 yuan a tonne.
Comments
Comments are closed for this article.