Iron ore futures prices climbed on Monday to their highest in nearly two weeks, buoyed by hopes of potential measures to bolster the feeble steel industry in top consumer China and expectations of a wave of post-holiday restocking from the country’s steelmakers.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) DCIOcv1 ended daytime trade 3.19% higher at 791.5 yuan ($109.42) a metric ton, the highest since Mar. 26.
The benchmark May iron ore SZZFK4 on the Singapore Exchange climbed 6.15% to $104.4 a ton, as of 0718 GMT, also the highest since Mar. 26.
The Singapore benchmark had dropped by 1% during April 4-5 trade when Chinese markets were closed for a public holiday after Beijing said last Wednesday that it would continue to manage crude steel output in 2024.
“The increase in hot metal output ahead of the public holiday showed that some steelmakers are in the middle of resuming production,” analysts at First Futures said in a note.
Average daily hot metal output among Chinese steelmakers surveyed climbed by 1% from the previous session to about 2.24 million tons, as of April 3, the highest since late-February, data from consultancy Mysteel showed.
“But it’s worth monitoring whether the demand recovery could sustain as steel stocks remained high,” they added.
Other steelmaking ingredients on the DCE surrendered some earlier losses, with coking coal DJMcv1 up 0.57% while coke DCJcv1 edged down 0.35%.
Steel benchmarks on the Shanghai Futures Exchange were higher.
Rebar SRBV4 gained 1.45%, stainless steel SHSSK4 rose 1.97%, hot-rolled coil SHHCV4 added 0.98%, while wire rod SWRK4 edged 0.16% higher.
Property woes in China, the world’s second-largest economy, still loomed over the ferrous market.
Chinese property developer Shimao Group 0813.HK said on Monday that China Construction Bank (Asia) 601939.SS had filed a liquidation petition against it in Hong Kong over its failure to repay loans of HK$1,579.5 million.
Source: Reuters