CHINESE iron ore futures extended gains to hit a two-week high yesterday amid supply concerns as bad weather disrupted iron ore shipment from the world’s two largest producing countries.

    The three biggest ports in Australia, which account for almost all of the country’s exports of the raw material, were closed to shipping due to an intensifying tropical cyclone and Brazil’s Vale also declared force majeure on some shipments from its mines because of heavy rains.

    Weak appetite in top consumer China, as slow steel demand kept steel mills from rebuilding much inventory of the raw material, is expected to limit gains this week.

    The most-traded iron ore futures May contract on the Dalian Commodity Exchange rose to a session high of 920 yuan (US$150), a level last seen Dec. 17. It narrowed gains to close at 911 yuan, up 0.9 percent.

    Australia can expect an average cyclone season running from Nov. 1 to April 30, with up to 11 storms, while Vale expected the storm to have an impact on 3 million to 4 million tons of contracted iron ore shipments in 2013, pushing up iron ore swaps.

    The iron ore swap for January contract cleared by the Singapore Exchange rose US$1 to US$135.5 a ton in morning trade. It had risen US$4-5 since last Thursday, brokers said.

    The benchmark 62 percent grade iron ore for immediate delivery into China rose to a two-week high of 1.4 percent to US$134 a ton last Friday, its highest since Dec.17, according to data compiler Steel Index.

    On the steel side, the most active rebar futures for May contract on the Shanghai Futures Exchange lost 1 percent to 3,573 yuan by close, as demand outlook remained shaky despite firm raw material prices.

    China’s industry ministry expected little improvement in steel demand next year due to falling investment in infrastructure and property, along with limited growth in other sectors like auto and shipbuilding. (SD-Agencies)