Dalian and Singapore iron ore futures climbed to their highest levels in more than three weeks on Wednesday, extending gains for a third consecutive day on hopes of improving demand after some mills resumed production.
The most-traded September iron ore futures contract on the Dalian Commodity Exchange (DCE) ended daytime trading 2.96% higher at 747.5 yuan ($108.14) a tonne, the highest since April 20.
The benchmark June iron ore SZZFM3 on the Singapore Exchange was up 2.53% at $107.7 a tonne, as of 0802 GMT, also its highest since April 20.
Some mills will restart operations as margins improved, and they will restock raw materials including iron ore to meet production needs, said a Shanghai-based ferrous market analyst, who requested anonymity as he was not authorised to speak to media.
Lacklustre data from China fuelled hopes that the country will roll more stimulus measures, lending further support to the iron ore market.
Investments during January-April in the property sector, which is the largest steel consumer in China, fell 6.2% year-on-year, versus a 5.8% drop in the first three months of 2023, according to data from the National Bureau of Statistics (NBS) on Tuesday.
Investments in the infrastructure area in the first four months grew 8.5% year-on-year, versus an 8.8% climb in the first three months of the year.
“The data came in weaker than expected, but it cannot go worse than this in the coming months. So, if one views from that perspective, then it’s good news,” said a Beijing-based analyst.
Some analysts expressed doubts over the sustainability of this round of price rally with the traditionally off-demand season approaching.
“We think this is merely a technical rebound and therefore will be short-lived,” said Chen Peng, a Beijing-based steelmaking raw materials analyst at Sinosteel Futures.
The other steelmaking ingredients-coking coal DJMcv1 advanced 3.29% and coke DCJcv1 grew 2.43%.
Rebar on the Shanghai Futures Exchange SRBcv1 climbed 1.45% to 3,715 yuan a tonne, hot-rolled coil SHHCcv1 rose 1.21%, and wire rod SWRcv1rallied 1.66%.
Source: Reuters