Brazilian mining company Vale has resumed operations at its mines in Itabira complex after remaining shuttered since June 5 due to COVID-19 concerns.
The Sub-Secretariat for Labour Inspection, in Minas Gerais, issued a Term of Suspension of Interdiction of the mine, said a company statement on Wednesday, lifting the ban on mining.
The operations at the mine were stopped compliance with the decision issued by the Regional Labour Court to curb the spread of COVID-19.
Vale had predicted a 15mn mt drop in iron ore production guidance of 310-330mn mt in 2020 due to COVID-19 related shutdowns.
The company, however, turned their focus to provide pellet feed for the pelletizers of the Tubarão Complex amid temporary shortage of pellets in the domestic market, while the shutdown at Itabira Complex remained.
Vale usually drives supply prices for iron ore exports to China and other major importers. Thus, after the suspension of mining activity, iron ore prices cfr China rose by $10 per mt to around $102/mt. The resumption of operations, therefore, is likely to lower prices to pre-shutdown rate of $85-90/mt
Meanwhile, Chinese raw material prices rose, driving hot-rolled coil (HRC) and cold-rolled coil (CRC) export prices higher. These prices could come under pressure with a decline in input cost.