Iron Ore Surges After Vale Mining Disaster
29 January 2019 - 03:16AM
Dow Jones News
By Amrith Ramkumar and David Hodari
Prices of iron ore surged on Monday after a Vale SA dam burst in
southeast Brazil, leaving at least 60 people dead and hundreds
missing and plunging the world's largest producer into a
crisis.
Iron-ore futures rose 5.4% to $78.59 a metric ton, with some
analysts anticipating that the Friday dam collapse could lead to
lower production of iron ore, the main ingredient in steel.
Vale shares tumbled 16% to $11.50 per American depositary share
Monday after the company suspended dividend payments and share
buybacks, froze executive bonuses and created committees to help
victims and investigate the incident, which released mining waste
and flooded a rural Brazilian town with reddish-brown mud.
"The fatal accident will likely lead to a prolonged closure of
the mine, " ING analysts said in a note to clients.
The disaster came less than four years after the failure of a
dam joint-owned by Vale and BHP Group killed 19 people.
The prospect of lower supply could lift prices with analysts
projecting consumption of a range of industrial materials to fall
as economic growth in China, the world's largest commodities
consumer, slows this year.
In base metals, most-active copper futures for March delivery
fell 1.3% to $2.6925 a pound on the Comex division of the New York
Mercantile Exchange, hurt by anxiety about slowing global growth
and falling commodity demand.
On the London Metal Exchange, aluminum for delivery in three
months fell 2% to $1,882.50 a metric ton. Zinc was unchanged at
$2,673, tin added less than 0.1% to $20,690, nickel fell 0.6% to
$11,890 and lead shed 0.7% to $2,095.
Among precious metals, most-active Comex gold futures wobbled
between small gains and losses and were recently up 0.3% at
$1,301.70 a troy ounce. Prices have hit their highest level since
June, boosted by stock-market volatility and safe-haven demand.
Most-active silver futures added 0.1% to $15.715, platinum eased
0.5% to $814.30 and palladium fell 1.5% to $1,300.20.
Write to Amrith Ramkumar at amrith.ramkumar@wsj.com and David
Hodari at David.Hodari@dowjones.com
(END) Dow Jones Newswires
January 28, 2019 11:01 ET (16:01 GMT)
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