Iron ore futures in China rose more than 3 percent to a two-week high on Monday, prompted by concerns over possible supply restrictions for steelmaking raw materials as Vale SA announced further production cuts.
On Saturday, the Brazilian miner announced that it would cut production at its mine with an annual capacity of more than 12 million tons, located in the state of Minas Gerais, and also suspend work on the dam in Dutor.
This is due to the temporary closure of his Brucutu mine and other mines in the southern states, which is expected to affect 70 million tons of production capacity per year.
The most active iron ore futures on the Dalian Commodity Exchange jumped 3.6 percent to 645 yuan (about $ 96.07) per tonne, peaking since March 4, and then closed up 1.6 percent up to RMB 632.50 (approximately US $ 94.2).
The impact of the supply disruptions was partially offset by falling demand at Chinese steel mills following additional environmental restrictions by local authorities ahead of the end of the winter anti-smog campaign in late March.
