Dalian iron ore futures prices extended gains to a second session on Wednesday, supported by expectations of improving demand and fewer portside arrivals that would lead to large destocking at major ports in top consumer China.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 1.48% higher at 820.50 yuan ($112.66) a metric ton.
The benchmark March iron ore contract on the Singapore Exchange was little changed at $106.70 a ton, as of 0706 GMT.
Analysts at Jinrui Futures forecast in a note that China’s port arrivals of iron ore from the world’s four largest producers in the second half of February will fall sharply from the prior week, to the lowest since 2019, resulting in large destocking at ports.
“It’s the traditionally slack season for iron ore shipments while domestic ore production recovery is limited, suggesting supply will stay at a relatively low level,” analysts at Huatai Futures said in a note.
Iron ore shipments from major supplier Australia had fallen sharply in the past two weeks due to tropical cyclones.
Ore demand, however, will be underpinned by the restocking from steelmakers, who will likely be motivated to ramp up production for profits, Huatai analysts added.
Rising bets of economic stimulus from China to spur its remaining struggling property sector also lent some support to prices.
However, lingering uncertainties on fresh tariffs by U.S. President Donald Trump curbed gains.
“Steel production will likely remain subdued amid increasing trade tariff challenges,” said ANZ analysts.
Other steelmaking ingredients on the DCE were mixed, with coking coal ticking down 0.05% and coke (DCJcv1) up 0.21%.
Most steel benchmarks on the Shanghai Futures Exchange advanced. Rebar rose 0.48%, hot-rolled coil climbed 0.32%, stainless steel added 0.54% while wire rod (SWRcv1) dipped 0.17%.
Source: Reuters