Dalian iron ore futures edged up 3.3% today (22nd May’19), amid low inventory in China and tight global supply, as per reports. Futures today increased to 727.5 yuan a tonne, the highest since contracts were launched in 2013.
Iron ore inventory at major Chinese ports fell to 131.7 MnT towards last weekend as against 133.35 MnT a week ago. Iron ore inventory have dropped to lowest levels since mid Oct’17, according to data compiled by SteelHome consultancy. Also the port stock is expected to drop down to around 120 MnT by June’19. Amid low stock in China, mills are expected to continue buying expensive material to continue full-load operation.
Also, global supply constraints from major countries Brazil and Australia continues to push the prices. The Vale forecast made last week for rupture of Sul Superior dam continues to exert upward pressure on the prices. According to Mysteel consultancy data, Iron ore shipment from Brazil fell by 416,000 MT last week as of 19th May.
Vale suspends freight services over dam landslide threat
As a precautionary measure, Vale has suspended the transport of freight on the Belo Horizonte branch line between Sabará and Barão de Cocais, which is operated by the Vitória-Minas Railroad (EFVM). The company is evaluating alternatives to minimize impacts.
The trains operate in the vicinity of the Gongo Soco mine pit, in Barão de Cocais, Minas Gerais, where recent movements were identified on the northern slope of the structure. The measure is a requirement by the National Mining Agency (ANM), who strives for people’s safety and the suspension will remain in place until Vale has carried out further risk analysis. The pit and dam are monitored 24 hours a day.
The passenger train that operates on the same line, has been suspended since 16th May, also for an indefinite period. Buses, leased by the company, are replacing trains operating in both directions between Belo Horizonte and the Dois Irmãos Train Station in Barão de Cocais.
Global iron ore prices up 7% W-o-W
Spot iron ore fines Fe 62% index has picked up to USD 101/MT, CNF China as against USD 94/MT, CNF China towards beginning of last week. The prices have hit 5 years high as the prices were last seen in May’14.
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