MANILA/BEIJING: Iron ore futures in Asia rose on Tuesday, with the benchmark Dalian contract advancing more than 3percent, as lingering concerns about tight supply of the steelmaking raw material eclipsed expectations of a slowdown in China’s steel demand.
Top steel producer China, which gets nearly two-thirds of seaborne iron ore supply, saw its imports of the raw material in June falling to the lowest in 13 months.
The most-traded September iron ore on China’s Dalian Commodity Exchange ended daytime trading 3.3percent higher at 1,225 yuan ($189.49) a tonne.
Iron ore’s most-active August contract on the Singapore Exchange was up 1.4percent at $210.80 a tonne by 0715 GMT.
“It remains uncertain whether the market will be able to see enough supply to meet long-term demand,” Tracy Liao, commodities strategist at Citi, told a Singapore International Ferrous Week (SIFW) forum attended by senior executives of major miners Rio Tinto, BHP Group and Vale SA.
Although a consensus is emerging among industry leaders and market analysts that China’s steel demand will ease in the second half of 2021, possibly slowing mills’ iron ore purchases, worries about supply constraints persist.
“The growth of China’s steel demand in the second half will be slower than the first half,” Wang Yingsheng, chief economist of the China Iron and Steel Association (CISA), said during the SIFW opening ceremonies.
He cited a seasonally slow construction activity as one reason.
“Progress is slow-going for Vale on its ‘pathway to 400 million tonnes per year’,” said Rohan Kendall, iron ore research head at Wood Mackenzie, referring to the Brazilian miner’s struggle to bring back lost output capacity following a dam collapse in 2019.
Construction steel rebar on the Shanghai Futures Exchange slipped 0.1percent, while hot rolled coil was flat. Stainless steel rose 0.4 percent. Dalian coking coal jumped 4.7 percent, while coke climbed 2.4 percent.
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