Dalian iron ore futures rose on Monday after a four-session run of losses, as strong demand outlook for the steelmaking ingredient in China offset concerns over data showing a steady rise in the country’s portside stockpiles.
Iron ore’s most-active January 2021 contract on the Dalian Commodity Exchange closed 2.4% higher at 848.50 yuan ($124.23) a tonne.
Its front-month October contract on the Singapore Exchange rose 1.4% to $125 a tonne at 0716 GMT, extending gains into a second session.
Underscoring China’s sharp demand recovery from the COVID-19 pandemic, the top steel producer’s imports of the raw material hit nearly 760 million tonnes between January and August, 11% higher than the same period last year.
“Importers have been buying a much larger proportion of available supply in recent months than they have ever done before, with no signs of any let up,” said Robert Rennie, head of financial market strategy at Westpac, which expects China’s iron ore imports to hit 92 million tonnes this month.
“Anything much above 97 mt would point to continued ‘insatiable’ demand in the face of limited ‘core’ supply,” said Rennie.
Iron ore stockpiles at Chinese ports had jumped to 118.95 million tonnes as of Sept. 11, the highest level since April 10, SteelHome consultancy data showed.
“Given the sheer size of continued Chinese iron ore imports, and the very limited rise in port inventory, we would simply downplay any signals there,” Rennie said.
Benchmark 62% iron ore’s spot price stood at $125.50 a tonne on Friday, SteelHome data showed.
Construction steel rebar on the Shanghai Futures Exchange gained 0.5%, while hot-rolled coil added 0.8% and stainless steel climbed 1.7%.
Coking coal rose 0.9% and coke advanced 1.3%.