Iron ore futures climbed for a third consecutive session on Wednesday, buoyed by expectations of pre-holiday restocking demand from steelmakers in top consumer China, although gains were limited by a weakening steel market.
The benchmark October iron ore SZZFV3 on the Singapore Exchange was up 0.17% at $119.25 a metric ton, as of 0700 GMT, hitting its highest level since March 31.
The most-traded January iron ore on China’s Dalian Commodity Exchange (DCE) DCIOcv1 ended daytime trading 0.47% higher at 860.5 yuan ($118.13) a ton.
“Factories will more or less stockpile some (iron ore) cargoes from ports to meet production needs over the upcoming week-long holiday break (starting from Sept. 29) as most mills have low inventories,” said a Chinese steel producer.
Iron ore transaction volumes at major ports surveyed rose 37.6% day-on-day to 1.56 million tons on Tuesday, while weekly inventories among mills stood at 85.32 million tons as of Sept. 8, down 0.5% on the week and 12% on the year, respectively, data from consultancy Mysteel showed.
Other steelmaking ingredients also lost ground, with coking coal DJMcv1 and coke DCJcv1 on the DCE down 0.9% and 0.51%, respectively.
Steel benchmarks on the Shanghai Futures Exchange broadly eased, weighed down by a supply glut in the absence of a government order to cut steel output and due to lukewarm downstream demand in the peak construction season.
Daily crude steel output of key member steel mills stood at about 2.16 million tons over Sept. 1-10, up 5.53% from the previous 10-day period, data from the China Iron and Steel Association (CISA) showed.
Rebar SRBcv1 dropped 0.13%, hot-rolled coil SHHCcv1 declined 0.59%, wire rod SWRcv1 lost 0.91% and stainless steel SHSScv1 fell 1.61%.