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UPDATE 1-China's iron ore posts first weekly loss in 2019

Published 22/02/2019, 07:26 pm
© Reuters.  UPDATE 1-China's iron ore posts first weekly loss in 2019
VALE3
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* Iron ore falls 3 pct from a week ago amid tepid demand

* Brazil suspends ops at 2 Vale mine complexes

* China says Australian coal imports continue as normal (Updates with closing prices, graphic)

By Enrico Dela Cruz

MANILA, Feb 22 (Reuters) - China's benchmark iron ore futures ticked higher in volatile trade on Friday, but posted their first weekly loss this year as demand for the steel-making raw material remained weak, despite concerns over supply.

The most-active iron ore contract, for May delivery, on the Dalian Commodity Exchange DCIOcv1 ended the session just 0.1 percent up at 618.5 yuan ($92.05) a tonne, after trading lower by as much as 3.2 percent earlier in the day. It fell 3 percent from a week ago.

"China's steel mills appeared reluctant to restock despite the supply outage from Brazil," ANZ Research said.

Dalian iron ore has risen more than 3 percent this month and rallied to record-high 657.5 yuan last week amid worries over supply disruptions following the collapse of top miner Vale SA's VALE3.SA Brumadinho tailings dam in Brazil.

In another bad news for Vale, Brazil's mining regulator has ordered the miner to suspend activity at its Fabrica and Vargem Grande complexes, as authorities crack down after last month's fatal dam break. did not offer an estimate on how much production would likely be lost from the suspension.

It remains uncertain if there are miners who could produce and export more iron ore to offset whatever is lost from Brazil's supply.

"Major producers, including BHP and Fortescue, have indicated they are unable to raise exports significantly to cover the losses from Brazil," ANZ said.

But any restocking by Chinese steel mills is expected to be subdued in the short term considering their pressured margins, tight credit conditions, and sintering cuts as pollution levels in China continue to worsen, according to Marex Spectron.

Dalian coking coal futures DJMcv1 was 0.7 percent higher at 1,295 yuan a tonne, ending a volatile week with market participants closely monitoring China's stepped-up environment and safety checks on coal imports.

Coke DCJcv1 rose 1.6 percent to 2,163 yuan.

China's foreign ministry said on Friday that Australian coal imports continue as normal, denying that the northern port of Dalian has banned coal from the world's top supplier. prices extended gains, with the most-active rebar contract on the Shanghai Futures Exchange SRBcv1 up 1.6 percent at 3,731 yuan a tonne. Hot rolled coil SHHCv1 edged up 0.9 percent to 3,706 yuan.

($1 = 6.7195 Chinese yuan)

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