October 22, 2019 / 7:30 AM / a month ago

UPDATE 1-China iron ore futures extend gains as Vale dam shutdown woes linger

* Dalian iron ore rose as much as 1.2% in morning trade

* Spot 62% iron ore steady at $86.5 a tonne

* Vale temporarily shut down Itabiruçu tailings dam (Adds details, quotes; updates closing prices)

BEIJING, Oct 22 (Reuters) - China’s iron ore futures extended gains for a third session, buoyed by continued supply worries, after one of the top global miners, Vale SA, halted a tailing dam earlier this month, and lowered full year iron ore and pellet sales guidance.

The Brazilian iron ore mining giant said on Monday it had temporarily closed its Itabiruçu tailings dam to assess the structure’s “geotechnical characteristics”, lowering its full year sales guidance between the lower end and midpoint of previous range of 307 and 332 million tonnes.

Shipments from Brazil and Australia stood at 19.66 million tonnes on the week ended Oct. 20, down by 1.2 million tonnes compared with the week earlier, according to data from Mysteel consultancy.

The most-traded iron ore contract on the Dalian Commodity Exchange, for January 2020 delivery, rose as much as 1.3% to 619 yuan ($87.54) per tonne on Tuesday. It closed up 0.8% at 616 yuan.

The increase in prices was curbed by cooling demand as China is coming into autumn-winter heating season, when constructions are slow and may faces restrictions pending air quality controls.

“Traders’ mentality are weakened and the prices are hard to sustain,” Huatai Futures wrote in a note.

Benchmark spot 62% iron ore for delivery to China SH-CCN-IRNOR62 remained unchanged at $86.5 a tonne from previous two sessions.

FUNDAMENTALS

* The most-active construction steel rebar contract on the Shanghai Futures Exchange, for January delivery inched up 0.7% to 3,318 yuan a tonne.

* Hot-rolled coil, the steel used in cars and home appliances, rose 0.6% to 3,313 yuan per tonne.

* Shanghai stainless steel futures, for February 2020 delivery, edged down 0.03% at 14,895 yuan.

* Other steelmaking raw materials mixed, with Dalian coking coal trading up 0.2% at 1,240 yuan a tonne, while coke slid 0.3% to 1,749 yuan.

* China will take steps to safeguard its interests, but won’t close its door to foreign investment and the global industry despite trade frictions with the United States, a Chinese official said on Tuesday.

* China’s vice foreign minister says China and the United States have achieved some progress in their trade talks and any problem could be resolved as long as both sides respected each other.

* For the top stories metals and other news, click TOP/MTL or MET/L ($1 = 7.0711 Chinese yuan renminbi) (Reporting by Min Zhang and Dominique Patton; editing by Rashmi Aich)

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