Iron ore futures in China gained further on Thursday, rising for six out of eight sessions, with values underpinned by a weaker dollar and signs of strong demand in world’s top steel consumer China.
Resumption of construction activity after the Lunar New Year break is boosting demand for steel and other raw materials, analysts said.
“On Tuesday and Wednesday we saw iron ore transactions in the spot market as buyers are restocking after the holidays,” said Wang Di, an analyst at CRU consultancy in Beijing.
“Another reason could be weakness in the dollar.”
Investors in the iron ore market expect economic data in the coming weeks to show the world’s second-largest economy got off to a good start in 2017.
Steady growth is giving the central bank room to slowly tighten monetary policy and contain the risks from high levels of debt. The market will seek further direction from trade data due on Friday.
The most-active rebar contract on the Shanghai Futures Exchange was up 1.1 percent at 3,234 yuan a tonne by 0150 GMT. The market has risen for three consecutive sessions.
Iron ore on the Dalian Commodity Exchange gained 0.9 percent to 641.5 yuan.
China’s foreign exchange regulator said on Wednesday that risks from cross-border capital flows will be generally under control in 2017, a day after the country reported that its forex reserves had fallen to near six-year lows.
Chinese authorities have taken a raft of steps in recent months to curb capital flight from the country to support its weakening yuan currency, while trying to bring in more foreign investment.
The dollar drooped against its peers early on Thursday, hovering near a 10-week low versus the yen, with a slide in U.S. Treasury yields amid investor flight to safety taking a toll on the currency.
In news Rio Tinto, shrugged off concerns on Wednesday that its sale of Guinea’s Simandou project to Chinalco had stalled after an investigation into payments to a consultant who helped it win rights to the huge iron ore deposit.
Iron ore for delivery to China’s Qingdao port rose 0.3 percent on Wednesday, according to Metal Bulletin.