Iron ore futures ended higher on Tuesday after miner Vale S.A. said it was suspending operations at a concentration plant in Brazil, though trading was subdued as market activity winds down ahead of China’s Oct. 1-8 National Day holidays.
The steelmaking ingredient’s most-traded January 2021 contract on China’s Dalian Commodity Exchange ended the morning session up 0.5 percent at 773.50 yuan ($113.35) a ton, rising for a second straight session.
Iron ore for October delivery on the Singapore Exchange rose 0.4 percent to $114.92 a ton, extending gains into a fourth session.
The suspension of operations at Vale’s Viga concentration plant following a court order will reduce its iron ore fine output by 11,000 tons per day.
“The supply disruption could provide short-term support to the market, which has eased from the six-year highs made earlier this month,” commodity strategists at ING said in a note.
Support for iron ore is seen intact from Chinese demand particularly for construction steel products, which has been boosted by the government’s infrastructure-focused stimulus measures.
“We anticipate Chinese construction steel demand, particularly for rebar, will remain seasonably robust through October and November,” said analysts at research house Navigate Commodities in Singapore.