Iron ore climbs on hot metal output data ahead of China holiday break

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Iron ore futures rose on Thursday, helped by higher hot metal output data, even as traders preferred to take a watchful stance ahead of the upcoming holiday break starting from Sept. 29 in top consumer China.

The most-traded January iron ore on China’s Dalian Commodity Exchange (DCE) ended daytime trading 0.89% higher to852 yuan ($116.66) a metric ton.

The benchmark October iron ore on the Singapore Exchange was up 0.77% at $117.45 a ton as of 0726 GMT.

Prices of the key steelmaking ingredient shrugged off weakness earlier the session as higher hot metal output data boosted sentiment.

Daily hot metal output among the 247 steel mills surveyed climbed by 0.1% on the week to 2.49 million tons as of Sept. 28, the highest level since October 2020, data from consultancy Mysteel showed.

Analysts at the National Australia Bank, however, said in a note that they expected to see downside risk to prices at current levels.

Other steelmaking ingredients strengthened, with coking coal DJMcv1 and coke on the DCE up 3.3% and 5.99%, respectively, on the anticipation of reduced supply ahead.

Sentiment on coal market was also lifted by news that steel mills in China’s Shandongand Hebei provinces on Wednesdayaccepted the second round of coke price rise of between 100 yuan and 110 yuan per ton, Mysteel analysts said in a report.

Steel benchmarks on the Shanghai Futures Exchange were mixed. Rebar ticked up 0.16%, hot-rolled coil SHHCcv1 rose 0.72% while wire rod SWRcv1 fell 5.5% and stainless steel edged down 0.24%.

“Prices of raw materials will be under some downward pressure as long as the steel market remains weak,” said Cheng Peng, a Beijing-based analyst at Sinosteel Futures.

Markets in Chinawill be closed for holidays during Sept. 29-Oct. 6.

Source: Reuters

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