Iron ore futures prices inched up on Tuesday amid resilient near-term demand for the steelmaking ingredient, though gains were limited by subdued economic data from top consumer China.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) TIO1! ended daytime trade 0.28% higher at 725 yuan ($100.39) a metric ton.
The benchmark June iron ore (SZZFM5) on the Singapore Exchange was trading 0.15% higher at $99.6 a ton as of 0704 GMT.
“Production among Chinese iron ore mining enterprises continued rising last week as operations resumed at more mines,” said consultancy Mysteel.
The total volume of iron ore concentrate produced increased 2% week-on-week to reach 498,800 tons a day on average, according to data from Mysteel.
Hot metal output, typically used to gauge iron ore demand, dipped 0.35% month-on-month to 2.45 million tons, said broker Everbright Futures.
While hot metal output fell slightly month-on-month, production is still relatively high, and the demand for steel in manufacturing continues to grow, said broker Galaxy Futures.
On the supply-side, shipments of iron ore from major producers Australia and Brazil increased 9.53% month-on-month to 33.48 million tons, said broker Hexun Futures in a note.
Broadly, sentiment was also hit by slowing growth in China’s factory output and retail sales numbers that missed expectations while stagnation in new home prices continued.
China’s crude steel output in April slid 7% from March, though production was still reasonably high, data showed on Monday.
Meanwhile, China and Hong Kong stocks rose broadly on Tuesday, as market sentiment improved after China cut key lending rates for the first time since October.
Other steelmaking ingredients on the DCE languished, with coking coal and coke (DCJcv1) down 1.47% and 1.71%, respectively.
Steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar RBF1! was down nearly 0.6%, hot-rolled coil EHR1! eased 0.37%, wire rod (SWRcv1) dipped 0.51% and stainless steel lost 1%
Source: Reuters