MANILA: Iron ore futures erased early losses to gain for a fourth straight session on Tuesday, underpinned by a buoyant demand outlook for the steelmaking ingredient in China and concerns over supply from Brazil.
Iron ore on China's Dalian Commodity Exchange closed up 0.1% at 757 yuan ($106.30) a tonne. It rose 1.0% to $98.20 a tonne on the Singapore Exchange in afternoon trade.
Indicating a solid recovery in demand as the world's second-biggest economy eased its coronavirus restrictions, shrinking steel inventories in top producer China have prompted mills to ramp up output, boosting demand for iron ore.
Benchmark 62% iron ore's spot price steadied at $102.50 a tonne on Monday, the highest since Aug. 5, SteelHome consultancy data showed.
A new round of anti-pollution output curbs this month in China's top steel-producing city of Tangshan may result in a further reduction in steel inventories, which will drive steel prices higher, said Helen Lau, an analyst at Argonaut Securities.
"Looking ahead, (China's) steel demand will continue to be underpinned by the infrastructure and property sectors," she said in a note. "This, combined with supply risks from Brazil, imply that iron ore may continue to test new highs."
Rising coronavirus infections in Brazil, the second worst-hit country in the world after the United States, could trigger mine closures and further movement restrictions, tightening global iron ore supply.
Brazil's Vale SA expects its iron ore shipments to China to rise in 2020, versus 2019, amid weak demand in other coronavirus-hit countries, the China Iron and Steel Association said.
Construction steel rebar on the Shanghai Futures Exchange gained 1.5% and hot-rolled coil climbed 0.7%, while stainless steel slipped 0.1%.
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