Seaborne iron ore prices rebounded slightly on Tuesday. News that Vale has new troubles at a tailings dam and will lower its shipment estimate supported the market.

The Kallanish KORE 62% Fe index gained $0.13/t to $88.25/dry metric tonne cfr Qingdao. On the Dalian Commodity Exchange January 2020 iron ore settled up CNY 2/t at CNY 613/t ($86.64/t), while on the Singapore Exchange November 62% Fe futures settled up $1.30/t at $83.56/t. In Tangshan, billet prices gained CNY 10/t to CNY 3,320/t.

Vale, meanwhile, announced overnight that it was suspending operations at the Itabiruçu dam, located at the Itabira Complex. As a result, its Conceição mine will see 2019 volumes limited. Vale said that, while it is keeping its shipment guidance steady at 307-332 million tonnes, it now expects to land in the bottom half of the range instead of the middle.

The impact on implied supply would be around 6mt if we take the midpoint of the two estimates. That amounts to a meaningful reduction, but not one that will cause long-lasting disruption to the market. With steel markets globally under pressure, iron ore prices corrected higher briefly but were soon forced lower by weak sentiment.