Spot iron ore and steel prices rose on Monday, clawing back some of the ground lost in recent weeks amid renewed hopes about stronger demand for metal even as worries persisted about a growing glut of iron ore in the world’s top buyer.
The most-active rebar on the Shanghai Futures Exchange was up 1.4 percent at 3,033 yuan a tonne at 0509 GMT, on track for its best daily performance in three weeks. Prices fell last week for a second straight week.
“While the market remains concerned about the impact of financial deleveraging in China on economic growth, the steel sector appears to be weathering the storm,” ANZ analysts said in a note.
Liu Xinwei, steel analyst at consultancy China Sublime Information Group, said demand from the infrastructure and construction sectors continues to prop up the market, even as activity will slow during the hotter summer months.
“Steel market is mainly supported by infrastructure and property market, especially relatively strong housing demand in third- and fourth-tier cities,” said Liu.
The most-traded iron ore on the Dalian Commodity Exchange rose 2 percent to 431.5 yuan ($62) a tonne. Last week, prices fell for a fifth week in six after hitting their lowest in almost a year.
Stockpiles of the raw material at China’s ports stood at 136.55 million tonnes, near the highest level since 2004, according to data tracked by SteelHome.