The first week of trading following the week-long Chinese New Year holiday saw the cost of iron ore in China skyrocket to its highest price in almost two years, following concerns linked to Brazil’s Vale SA, Caixin reports.
On the Dalian Commodity Exchange, the price of iron ore for delivery in May spiked about 8% to RMB 652 ($96.16), reaching a high not seen since March 2017. The price settled down by 2.8% on Tuesday, ending the day at RMB 634 per ton.
Vale, a chief supplier of China’s steel industry and the world’s biggest iron ore producer in 2017, has been in the spotlight since the end of January when one of its dams burst in the state of Minas Gerais, leaving 165 dead and 160 missing.
China is the largest consumer of iron ore globally, producing half of the world’s steel. It accounted for 51.3% of total global steel output last year, up from 50.3% the previous year, according to the World Steel Association.
A court ordered Vale to halt production at its largest iron ore mine in Minas Gerais on Feb 4, affecting 30 million tons of annual capacity. The company had previously stopped output at 10 other mining facilities following the industrial accident, bringing total affected output to 70 million tons of annual capacity.