中文
China's iron ore futures rose for a sixth straight session on February 18 as concerns about tightening supplies intensified after miner Rio Tinto lowered its shipment forecast for the steelmaking raw material from Australia's Pilbara region.
The Dalian Commodity Exchange's most-traded iron ore contract ended 1.4% higher at 639.50 yuan/t ($91.32/t), after rising as much as 2.3%.
Rio, the Anglo-Australian miner that last year dislodged Brazil's Vale SA as the world's top iron ore producer, said it will take time for its Pilbara operations to return to normal after tropical cyclone Damien damaged some infrastructure.
Rio now expects Pilbara shipments in 2020 to hit 324 million tonnes-334 million tonnes, lower than its previous outlook of 330 million tonnes-343 million tonnes.
Another major iron ore miner, BHP Group, said supply disruptions have lent support to iron ore prices and that it has not yet seen a major impact on its business from the coronavirus epidemic.
Sparking iron ore's price rally, Vale last week scaled down its first-quarter production outlook following heavy rain in Brazil that hampered its operations.
Supply concerns have also driven spot prices to fresh peaks in more than three weeks, with the benchmark 62% grade settling at $90/t on February 17.
Keeping iron ore's rally in check, weak downstream steel demand is pushing inventories higher in China, amid work stoppages and transport restrictions to contain the epidemic that has killed nearly 1,900 people and infected more than 72,000.
Higher iron ore prices are squeezing steel profit margins and may further curb demand for the material.
"Many steel mills are planning to increase the scope of production reduction or maintenance to hedge against lower profits or high inventory," analysts at Sino-Steel Futures Co Ltd in Beijing said in a note.
The average profit from construction steel rebar for China's 91 blast-furnace mills almost halved to 98 yuan/t in January from December's 180 yuan/t.
(Writing by Jessie Jia Editing by Harry Huo)
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