MANILA: Dalian iron ore rose to a one-month high on Friday as trading resumed after a week-long holiday in China, with market participants upbeat about demand prospects for the raw material in the world's top steel producer.
China's electricity shortage has raised concerns that energy-intensive electric arc furnaces that utilise iron scraps to produce steel could be hit, which means more steel output required from blast furnaces utilising iron ore.
The most-traded January iron ore on China's Dalian Commodity Exchange ended the morning session 4.8% higher at 762 yuan ($118.13) a tonne, just below a session-high 767 yuan, its strongest since Sept. 7.
November iron ore on the Singapore Exchange jumped 5.5% to $123.90 a tonne.
The volatile trade, however, indicated that overall sentiment remained fragile, with the market hounded by issues in the Chinese property sector, which accounts for about a quarter of domestic steel demand.
"With property developers struggling to high debt levels, the spectre of strong demand for steel and iron ore remains low," said ANZ senior commodity strategist Daniel Hynes.
Comments
Comments are closed for this article.