Iron-ore sizzles as Vale's output guidance adds fuel to rally
MANILA – China's iron-ore benchmark scaled a record high on Thursday after miner Vale SA unveiled output targets that lagged forecasts, adding to concerns about weak seaborne supply.
Iron ore on China's Dalian Commodity Exchange ended daytime trade up 1.7% at 937 yuan ($142.86) a tonne, near its peak of 941.50 yuan. It now has gained more than 80% this year, making it the hottest major commodity of 2020.
The steelmaking ingredient climbed 1.1% to $132.50 a tonne on the Singapore Exchange by 07:17 GMT, advancing for the eighth consecutive session.
Brazil's Vale trimmed its 2020 output guidance to 300-million to 305-million tonnes, from a previous target of at least 310-million tonnes.
The 2021 production forecast of 315-million to 335-million tonnes, which took into account rainy conditions and other risks, also disappointed some analysts.
The disappointing forecasts added fuel to an iron ore rally that began last week, driven mainly by robust demand in top steel producer China and partly by supply concerns.
Spot iron-ore jumped to $133.50 a tonne on Wednesday, the highest since January 2014, according to SteelHome consultancy data.
China's iron ore demand revved up in the second half of 2020 as the world's second-largest economy is on track to become the first to fully recover from the Covid-19 pandemic. "China's infrastructure, property and manufacturing sectors have all surpassed expectations this year," Commonwealth Bank of Australia commodities analyst Vivek Dhar said.
Rising demand and weaker supply have both resulted in a tighter seaborne iron ore market, he said, citing ship-tracking data that indicated lower shipments from top supplier Australia in November.
Steel futures retreated after recent gains, with rebar on the Shanghai Futures Exchange down 1.2%, while hot-rolled coil slipped 0.2%. Stainless steel was flat.
Tight supply kept coking coal well supported, gaining 1.3%, while coke dropped 0.5%.
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation