China’s iron ore extends gains as mills restock raw materials

Madiha Shakeel September 3, 2019

BEIJING: Chinese iron ore futures rose nearly 4% on Tuesday, gaining for the fourth straight session, boosted by stable demand as steel mills restocked raw materials.

The most-traded iron ore futures contract on the Dalian Commodity Exchange for January 2020 delivery rose as much as 3.8% to 642 yuan ($90.51) a tonne in early trade.

“Iron ore prices fell steeply recently, hurt by macro-economy and consumption pessimism,” Zhao Yu, an analyst from Huatai Futures said, adding that increasing supplies also dragged down prices. Dalian iron ore plunged more than 21% in August, logging its worst month since March 2018.

But iron ore prices are not expected to rise too much as overall demand remains stable, according to Zhuo Guiq    iu, analyst from Jinrui Futures.

“Tangshan is extending its production restrictions in September, but the intensity is at same level with August,” Zhuo said.

The major steel-producing city of Tangshan ranked the third last polluter in August in the 168 major cities monitored across China, logging the best air quality of its historical average, the city administration said in a statement on its website on Monday.

FUNDAMENTALS

* Benchmark 62% iron ore for delivery to China <SH-CCN-IRNOR62>, as assessed by SteelHome consultancy, settled at $89 a tonne on Monday.

* The most-active construction steel rebar contract on the Shanghai Futures Exchange rose 1.1% to 3,405 yuan a tonne as of 0215GMT.

* Hot-rolled coil, used in cars and home appliances, on the Shanghai Futures Exchange rose 1.4% to 3,459 yuan per tonne.

* Other steelmaking ingredients mixed, with Dalian coking coal up 0.15% at 1,312 yuan a tonne, while coke  down 0.4% at 1,896 yuan.

* For the top stories metals and other news, click TOP/MTL or MET/L

Copyright Reuters, 2019

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