April 17, 2019 / 7:54 AM / in 2 months

UPDATE 1-Dalian iron ore slumps as Vale set to reopen Brucutu mine

* Vale expects to resume Brucutu mine within 72 hrs

* BHP, Rio cut 2019 output forecasts

* China’s March steel output up 10 pct y/y (Updates closing prices; adds China March steel output data)

BEIJING, April 17 (Reuters) - China’s Dalian iron ore futures plunged on Wednesday as Brazilian iron ore miner Vale SA prepared to resume operations at the Brucutu mine, even as its Australian rivals cut their production guidance for the year.

The most-traded iron ore futures for September delivery on the Dalian commodity Exchange sank as much as 4.7 percent shortly after market opened. It closed down 3.8 percent at 621 yuan ($92.86).

The market expects a relaxing supply as Vale said in a securities filing late on Tuesday that it would resume operations at its largest iron ore mine in Minas Gerais state within 72 hours.

The mine, with annual capacity of 30 million tonnes, has remained shut since early February after a tailings dam burst in late January, killing hundreds of people.

“We have already seen shipment volume for iron ore from Australia and Brazil increasing in the past two weeks, which adds pressure on prices,” said analysts from CITIC Futures in a note in Mandarin.

But they also said that demand from Chinese mills remains firm in April as winter restrictions in northern China have eased.

Inventory of imported iron ore at Chinese ports stood at 148.9 million tonnes as of April 12, data compiled by SteelHome showed.

Meanwhile, major iron ore miners in Australia, BHP Group and Rio Tinto, cut their iron ore production outlooks for this year after a tropical cyclone hit Western Australia in March.

BHP lowered its production forecast to 265-270 million tonnes from 273-283 million tonnes, while Rio Tinto cut its estimate to 333-343 million tonnes from 338-350 million tonnes.

Benchmark Shanghai rebar prices edged down 0.2 percent to 3,795 yuan a tonne amid unexpectedly steady GDP data of 6.4 percent in the first quarter.

Other steel-making raw materials also stayed flat, with coking coal up 0.4 percent at 1,324.5 yuan and coke down 0.2 percent 2,047 yuan.

China’s national statistic bureau also said on Wednesday that the country churned out 80.33 million tonnes of crude steel last month, up 10 percent from a year ago, as mills ramped up operations to cash in on fat profits.

$1 = 6.6877 Chinese yuan renminbi Reporting by Muyu Xu and Shivani Singh; Editing by Shreejay Sinha and Rashmi Aich

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