* Dalian iron ore hits record high 684.5 yuan/T
* Rally seen supported by steel mills’ demand
* Shanghai rebar, HRC prices also higher
By Enrico Dela Cruz
MANILA, April 3 (Reuters) - Iron ore futures in China crossed the $100 per tonne level for the first time in early trade on Wednesday, buoyed by supply disruption concerns flagged by the world’s major sellers of the steelmaking raw material as well as demand from steel mills.
The most traded May 2019 iron ore contract on the Dalian Commodity Exchange jumped to a record 684.5 yuan ($101.83) a tonne, a hefty 4.4 percent rise from Tuesday’s close.
“I think there’s still room for price to go up, maybe around $5 to $6 (a tonne) more from the current level,” a Shanghai-based trader said, adding that there’s “good” demand currently for iron ore from Chinese steel mills.
The world’s top suppliers of the steelmaking raw material — Vale SA, BHP Group Ltd, Rio Tinto and Fortescue — have reduced their output and shipment estimates this year, raising concerns the market could be tighter than expected.
Iron ore prices initially rallied after the fatal tailings dam disaster in Brazil in February at a mine operated by Vale. Last week, the world’s biggest supplier said its sales this year could be up to 75 million tonnes less than initially forecast, after several mines were halted following the disaster.
On Monday, Vale said it failed to obtain stability certificates for 13 dams under review and as a consequence, according to ANZ Research, Vale has suspended operations at 10 dams and dikes in Minas Gerais.
“While iron ore operations weren’t impacted, it doesn’t bode well for the restart of ones currently suspended,” ANZ said in a note.
Weather-related supply disruptions from Australia added to the price pressure, with BHP on Tuesday, saying initial estimates indicated its iron ore production would take a hit of about 6-8 million tonnes after cyclone Veronica affected its operations.
Rio, the world’s No. 2 iron ore miner, on Monday cut its 2019 outlook for shipments from Australia’s Pilbara region due to production disruption and damage caused by cyclone Veronica.
Fortescue said on March 25 it expected 1.5 million to 2 million tonnes of shipments to be delayed also due to disruption caused by a cyclone.
The most-active rebar contract on the Shanghai Futures Exchange rose as much as 1.9 percent to 3,596 yuan a tonne. Hot rolled coil climbed 1.4 percent to 3,816 yuan.
Other steelmaking ingredients were steady by 0213 GMT, with coking coal at 1,241 yuan a tonne and coke at 2012.5 yuan.
($1 = 6.7223 Chinese yuan)
Reporting by Enrico dela Cruz; Editing by Rashmi Aich