SHANGHAI, Jul 24 (SMM) – Dalian iron ore prices continued to ease gains from previous weeks and slid to a nearly two-week low on Wednesday July 24, as approved resumption at Brazilian miner Vale depressed confidence in longs. 

On Wednesday July 24, the most-traded September iron ore contract on the Dalian Commodity Exchange lost as much as 4% to a two-week low of 842 yuan/mt, before it finished 2.66% lower on the day at 860 yuan/mt. 

Vale was authorised to partially resume operation at its Vargem Grande complex, which would increase five-million mt to its annual production, the company said on Tuesday July 23. 

Production at Vargem Grande was ordered to suspend in February following a deadly dam burst in January.

BHP Group, the world’s biggest miner, last week forecasted modest growth in its output in 2019/2020 amid a surge in prices. This also eased concerns over iron ore supplies.

Spot prices of iron ore also weakened as traders cut offers by 5-20 yuan/mt in early trades of Wednesday July 24.

Transactions of PB fine in Shandong occurred at 860 yuan/mt on the morning of July 24, down 20 yuan/mt from the previous morning. Cautious market sentiment even drove prices of PB fine for pre-sale to 850-855 yuan/mt on Wednesday. 

SMM expects prices to trade rangebound in the short term as costs kept some sellers from reducing offers, and as inventories across Chinese ports have yet to see a significant buildup.