BEIJING: Benchmark iron ore futures on China’s Dalian Commodity Exchange (DCE) extended gains into a third straight session on Tuesday, as strong profits enabled steel producers to afford the key raw material even as prices jumped to a near two-month high.
“The iron ore sector is facing high-supply, high-demand and high-inventory situation,” Huatai Futures wrote in a note, adding that ore prices are still largely decided by consumption.
“Spot steel prices and mills’ profits are increasing... steel companies haven’t tried to squeeze costs by cutting iron ore prices,” Huatai added.
The most traded January contract of iron ore jumped as much as 3.8% in the session, the highest since Sept.15. It closed up 1.7% at 826 yuan ($124.91) a tonne.
Spot prices of iron ore with 62% iron content for delivery to China rose by $2 to $120.5 per tonne on Monday, according to SteelHome consultancy.
Steel rebar on the Shanghai Futures Exchange, mainly used in the construction sector, inched 0.3% lower to 3,826 yuan a tonne.
Hot-rolled coils fell 0.9% to 3,933 yuan per tonne.
Coking coal futures on the DCE dropped 1.2% to 1,295 yuan per tonne.
Coke fell 1.3% to 2,421 yuan a tonne.
Stainless steel futures on the Shanghai exchange declined 0.7% to 13,785 yuan per tonne.
China’s factory-gate prices fell at a sharper-than-expected pace in October, weighed by soft demand for fuel even as the country’s trade and manufacturing sectors staged impressive recoveries from their COVID-19 slump.
Tata Steel Europe and South Korea’s POSCO will collaborate to develop steel tubes needed for high-speed hyperloop transportation systems, the companies said on Monday.—Reuters
Comments
Comments are closed for this article.