BEIJING: Iron ore futures prices ticked up on Thursday after falling for five straight sessions, as some portside restocking ahead of a holiday in top consumer China lifted sentiment, although diminishing demand and high supplies capped gains.
Steelmakers typically tend to stock up on portside ore cargoes ahead of the Dragon Boat Festival, falling on June 8-10 this year, analysts said.
Transaction volumes at major ports climbed 35% day-on-day to 1.17 million metric tons on Wednesday, data from consultancy Mysteel showed.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.24% higher at 833.5 yuan ($115.05) a ton, as of 0253 GMT on Thursday.
The benchmark July iron ore on the Singapore Exchange was 0.89% higher at $108.05 a ton.
“Iron ore prices are likely to consolidate amid downward pressure stemming from languishing demand and high supply, and a support level at $100 a ton,” analysts at Hongyuan Futures said in a note.
Demand wilted with the daily crude steel output among key members under the China Iron and Steel Association sliding to around 2.18 million tons during May 21-31, a fall of 1.49% from the previous 10-day period, CISA data showed.
A continuous price fall had triggered bearish expectations, with Citi seeing iron ore at $95 a ton within the next three months, while some Chinese analysts forecasting prices might dive to $90 a ton within two months if there were no new stimulus.
Other steelmaking ingredients on the DCE continued downtrend, with coking coal and coke down 2.07% and 0.82%, respectively.
Steel benchmarks on the Shanghai Futures Exchange were mixed.
Rebar dipped 0.25%, stainless steel shed 0.84% while hot-rolled coil ticked up 0.05% and wire rod nudged up 0.1%.
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