MANILA: Iron ore futures in China climbed in early trade on Monday, propped up by stockpiling demand ahead of Labour Day holidays beginning May 1, while steel prices edged higher as concerns persist over production curbs.
The most-traded September 2019 iron ore contract on the Dalian Commodity Exchange rose as much as 1.8 percent to 631 yuan ($93.71) a tonne.
Spot iron ore for delivery to China <SH-CCN-IRNOR62>, with 62 percent fines, was at $93.80 a tonne, based on the latest data from SteelHome consultancy.
"For the moment, demand (for the steelmaking feedstock) is still quite good so we will likely see prices stable or a bit higher," a Shanghai-based trader said. "But the market will likely be generally quiet because there are only two working days in China this week."
Other steelmaking raw materials were mixed, with coking coal rising 0.3 percent to 1,355 yuan a tonne by 0217 GMT, while coke easing 0.3 percent to 2,024 yuan.
The most-active October 2019 construction steel rebar contract on the Shanghai Futures Exchange gained as much as 1 percent to 3,770 yuan a tonne.
Hot rolled coil, used in cars and home appliances, edged up 1 percent to 3,711 yuan a tonne.
Production restrictions continued to provide support to steel prices, the trader said, as mills in top steelmaking cities - Tangshan and Handan - are required to reduce output as part of local governments' efforts to improve air quality.
The overall outlook for China's mammoth steel industry remains bearish, however, as the world's top consumer and producer of the commodity faces risks from excess capacity amid sluggish demand and increased costs of raw materials.
China's Iron and Steel Association on Sunday forecast weaker steel demand due to structural changes in the world's second-largest economy, and said the industry would not be able to sustain high production growth.
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