BEIJING: Dalian iron ore futures rose for a third consecutive session on Tuesday, as high hot metal output and relatively low portside inventories underpinned the steelmaking ingredient.
The most-traded September iron ore on the Dalian Commodity Exchange (DCE) was up 1.27% at 718.5 yuan ($103.95) a tonne, as of 0258 GMT.
“Comparatively high hot metal output at the moment provided some support to iron ore demand,” analysts at Huatai Futures said in a morning note.
Hot metal is a blast furnace product and its output is often used to gauge iron ore demand.
The average daily hot metal output among the surveyed 247 Chinese steel mills stood at 2.42 million tonnes last week, up 0.25% year-on-year but down 0.83% month-on-month, data from consultancy Mysteel showed.
“It seems that mills are increasingly less interested in taking initiative to cut their (steel) output, given that they could still make some money based on current production costs. Therefore, demand will be stable in the short term,” analysts at Sinosteel Futures said in a note.
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Meanwhile, portside iron ore inventories fell 2.2% month-on-month to 126.9 million tonnes as of May 26, according to data from consultancy Steelhome. On a year-on-year basis, the inventories were down 5.5%.
The U.S. dollar-based Singapore benchmark fell, weighed down by concerns that the Federal Reserve may raise rates at its June 13-14 meeting to combat inflation amid stronger-than-expected economic data.
The most active June iron ore on the Singapore Exchange was 0.58% lower at $102.2 a tonne, as of 0303 GMT.
Among other steelmaking ingredients, coking coal fell 0.52% and coke dipped 0.43%.
Rebar on the Shanghai Futures Exchange ticked up by 0.14% to 3,494 yuan a tonne, hot-rolled coil nudged up 0.11%, wire rod was little changed and stainless steel climbed by 1.11%.
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