Spot iron ore prices are set to pare weekly gains after the commodity came off a 10-week high hit on Monday as Chinese buying interest stalled following a recent restocking binge. Australian miner Atlas Iron said on Friday it would resume full mining operations, given the recent rebound in iron ore prices to above $60 a tonne, potentially adding to a glut that has caused prices of the raw material to shed more than 50 percent from the start of 2014.
Iron ore for immediate delivery to China's Tianjin port fell 1.3 percent to $61.20 a tonne on Thursday, according to the Steel Index. The benchmark is still up 1.2 percent so far for the week, having hit $62.50 on Monday, its loftiest since March 2. But the weekly gain is much smaller than last week's 7.7-percent jump.
"Mills have already covered their short-term requirements and they're not in a hurry to replenish further this week," said a Shanghai-based iron ore trader. But some traders with stocks at China's iron ore ports were still holding back offers, hoping prices would still recover, the trader said. "Availability of port stocks is still limited." Iron ore stocks at Chinese ports fell 4.7 million tonnes from the previous week to 92.15 million tonnes on May 8, the lowest since January 2014, data from consultancy SteelHome showed.
The most-traded September iron ore contract on the Dalian Commodity Exchange closed 1.2 percent higher at 428 yuan ($69) a tonne, after sliding about 3 percent on Thursday. Australian Prime Minister Tony Abbott threw his support behind a proposed senate inquiry into the economic impact of a slump in the price of iron ore, ratcheting up pressure on top producers Rio Tinto and BHP Billiton . BHP expects growth in iron ore supply to outpace demand and keep prices under pressure, but rejected calls for supply restraint.
Top iron ore miner Vale is offering a new product, Brazilian Blend fines, via a tender closing later on Friday, traders said. The fines have iron content of 63.1 percent and the cargo on offer is 85,000 tonnes for loading next week, they said.