Iron ore prices slumped on Wednesday, bringing steel futures prices down with them. Contributing to this was Vale, which notified the market that it had been approved to restart its Brucutu mine.

On the Shanghai Futures Exchange the May rebar contract closed at CNY 3,777/tonne ($563/t), CNY 11/t down from Tuesday, while the same contract for hot rolled coil closed down CNY 11/t to CNY 3,688/t. Tangshan billet prices meanwhile slumped CNY 50/t to CNY 3,490/t.

The Kallanish KORE 62% Fe index slumped $1.50/tonne to $85.12/dry metric ton cfr Qingdao. On the Dalian Commodity Exchange May iron ore settled down CNY 23.5/t at CNY 613.5/t, while on the Singapore Exchange April 62% Fe futures settled down $2.81/t at $82.49/t.

Iron ore futures markets slumped on Wednesday morning after Vale flagged the possibility of a restart of its Brucutu mine. The Lower Public Treasury Court of Belo Horizonte has authorised the restart of operations at the Brucutu mine and the Laranjeiras tailings dam (see separate article). The decision also requires the secretary of state for environment and sustainable development (SEMAD) to comply with its decision. However, the mine so far remains out of action and Vale says it is waiting for SEMAD to approve restart. It is not clear if the court’s decision will be contested or not.

Brucutu was closed immediately after the tailings dam disaster at the end of January that cost over 300 lives. The 30 million tonnes/year mine was expected to be closed for a significant period, at least to the end of the year, and markets were factoring in a significant loss of production from the mine.