Iron ore futures prices edged higher on Wednesday, underpinned by seasonal demand for the steelmaking ingredient, although output cuts by some steel makers in China capped further gains.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) TIO1! ended daytime trade 0.19% higher at 780 yuan ($107.38) a metric ton.
The benchmark April iron ore (SZZFJ5) on the Singapore Exchange was 0.61% higher at $102.2 a ton as of 0707 GMT.
Key steel enterprises produced 2.75 million tons of crude steel per day in March so far, marking a monthly increase of 1.6%, said broker Hexun Futures, citing statistics from the China Iron and Steel Association.
Blast furnaces that had been overhauled resumed production in March, while the daily average molten iron output rebounded month-on-month, Hexun said in a separate note.
Still, iron ore prices remained steady despite the industry entering its normal peak construction season, said ANZ analysts, adding that gains were offset by signs of weakness in the steel market.
Rizhao Iron & Steel plans to complete the dismantling of four 1,080 cubic meter blast furnaces in early April, removing annual hot metal output of 1.9 million tons, according to consultancy Fubao and a person familiar with the matter.
Rizhao Steel did not immediately respond to a Reuters request for comment.
This comes as several steel makers in China’s Xinjiang region began production cuts from Monday, local reports said, after Beijing earlier stated its intent to curb capacity in an industry long plagued by overcapacity.
Other steelmaking ingredients on the DCE traded mixed, with coking coal down 0.05% and coke (DCJcv1) up 1.35%
Most steel benchmarks on the Shanghai Futures Exchange advanced. Rebar edged 0.06% higher, hot-rolled coil was up 0.12%, stainless steel HRC1! rose nearly 0.4%, while wire rod (SWRcv1) ticked down 0.35%.
Source: Reuters