AIRLINK 62.48 Increased By ▲ 2.05 (3.39%)
BOP 5.36 Increased By ▲ 0.01 (0.19%)
CNERGY 4.58 Decreased By ▼ -0.02 (-0.43%)
DFML 15.50 Increased By ▲ 0.66 (4.45%)
DGKC 66.40 Increased By ▲ 1.60 (2.47%)
FCCL 17.59 Increased By ▲ 0.73 (4.33%)
FFBL 27.70 Increased By ▲ 2.95 (11.92%)
FFL 9.27 Increased By ▲ 0.21 (2.32%)
GGL 10.06 Increased By ▲ 0.10 (1%)
HBL 105.70 Increased By ▲ 1.49 (1.43%)
HUBC 122.30 Increased By ▲ 4.78 (4.07%)
HUMNL 6.60 Increased By ▲ 0.06 (0.92%)
KEL 4.50 Decreased By ▼ -0.05 (-1.1%)
KOSM 4.48 Decreased By ▼ -0.09 (-1.97%)
MLCF 36.20 Increased By ▲ 0.79 (2.23%)
OGDC 122.92 Increased By ▲ 0.53 (0.43%)
PAEL 23.00 Increased By ▲ 1.09 (4.97%)
PIAA 29.34 Increased By ▲ 2.05 (7.51%)
PIBTL 5.80 Decreased By ▼ -0.14 (-2.36%)
PPL 107.50 Increased By ▲ 0.13 (0.12%)
PRL 27.25 Increased By ▲ 0.74 (2.79%)
PTC 18.07 Increased By ▲ 1.97 (12.24%)
SEARL 53.00 Decreased By ▼ -0.63 (-1.17%)
SNGP 63.21 Increased By ▲ 2.01 (3.28%)
SSGC 10.80 Increased By ▲ 0.05 (0.47%)
TELE 9.20 Increased By ▲ 0.71 (8.36%)
TPLP 11.44 Increased By ▲ 0.86 (8.13%)
TRG 70.86 Increased By ▲ 0.95 (1.36%)
UNITY 23.62 Increased By ▲ 0.11 (0.47%)
WTL 1.28 No Change ▼ 0.00 (0%)
BR100 6,944 Increased By 65.8 (0.96%)
BR30 22,827 Increased By 258.6 (1.15%)
KSE100 67,142 Increased By 594.3 (0.89%)
KSE30 22,090 Increased By 175.1 (0.8%)
Markets

China iron ore marks fifth monthly gain; steel rises on firm demand

MANILA: China's iron ore futures rose on Tuesday and posted their fifth straight monthly gain, while construction st
Published April 30, 2019

MANILA: China's iron ore futures rose on Tuesday and posted their fifth straight monthly gain, while construction steel marked its best month since July 2018, buoyed by hopes that demand will remain firm after the Labour Day holidays.

Declining iron ore and steel inventories in China prompted mills and traders to replenish stocks ahead of a five-day weekend, also helping prop up prices.

The Dalian and Shanghai futures markets will be closed from Wednesday and reopen on Monday, May 6.

The most-traded iron ore contract on the Dalian Commodity Exchange climbed 2.1 percent to 639 yuan ($94.84) a tonne, its highest close in two weeks.

The steelmaking feedstock gained nearly 12 percent in April, largely due to the supply shock following a deadly mine tailings dam disaster and subsequent mine closures in Brazil in the first quarter.

"Ahead of the long holiday in China there are currently some restocking efforts," said Richard Lu, analyst at CRU consultancy in Beijing. "Inventories continue to decline across the entire supply chain, indicating that steel demand remains quite good."

Spot iron ore for delivery to China <SH-CCN-IRNOR62>, with 62 percent fines, was steady at $93.80 a tonne on Monday, based on data tracked by SteelHome consultancy. Prices have stabilised at about $92 to $95 a tonne, Lu said, after a recent rally.

The most-active rebar contract on the Shanghai Futures Exchange climbed 1.8 percent to 3,828 yuan a tonne, after hitting a two-week high of 3,833 yuan earlier in the day. The construction steel rose 11.3 percent in April, its best month in nine.

"Seasonal demand improvement will continue to support steel prices," said Lu, who is not ruling out a post-holiday restocking. "Construction activities typically pick up in May and June when the weather is usually favourable."

Hot rolled coil, semi-finished steel used in cars and home appliances, jumped 2.5 percent to 3,789 yuan a tonne.

"No matter how strong the demand is, the high steel output may prevent prices from increasing sharply," Lu said.

Crude steel output in China, the world's top producer and consumer of the alloy, rose to 80.3 million tonnes in March, up 10.0 percent from a year ago, figures from the World Steel Association showed on Monday. China's steel output accounts for about half of global production.

Any further gains in iron ore may also be muted given the uncertain outlook for China's steel demand particularly in the second half, and the fact that the raw material is deemed "overly priced" at the moment, Lu said.

"Steel mills only purchase (iron ore) on demand. They want to have the flexibility," he said, adding that mills have also become "very prudent" and selective in their purchases as the high cost of raw materials have squeezed their profit.

Coke edged up 0.8 percent to 2,046.5 yuan a tonne, but coking coal bucked the trend with a 0.2 percent drop to 1,352 yuan.

Copyright Reuters, 2019

Comments

Comments are closed.