SINGAPORE: Iron ore futures prices rebounded on Tuesday, supported by a recovery in Chinese concentrate production after weeks of declines, while gains in steel benchmarks reflected improving sentiment despite weak housing data.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.82percent higher at 803.5 yuan (USD112.88) a metric ton, as of 0244 GMT. The benchmark September iron ore on the Singapore Exchange was 0.24 percent higher at USD105.75 a ton.
After weeks of declines, production of iron ore concentrates by Chinese mining companies rebounded last week, a sign that domestic miners are gradually recovering their operations, said Chinese consultancy Mysteel.
Broadly, China’s crude steel output in August slid for a third consecutive month after steelmakers in Tangshan, China’s top steelmaking hub, curbed operations for the military parade, while raw steel output in Brazil fell 4.6 percent year-on-year in August. Meanwhile, China’s new home prices fell 0.3percent in August month-on-month, as weakness in the property sector persisted. Elsewhere, the state-backed China Iron and Steel Association will hold a meeting with the heads of iron ore procurement at steelmakers on Thursday. Other steelmaking ingredients on the DCE strengthened, with coking coal and coke up 5.42 percent and 4.03 percent, respectively.
China’s coal output fell 3percent year-on-year in August, down to its lowest level for a month in over a year as curbs on production continued to weigh.
Still, capacity utilisation rates at coking coal mines was up 6.9 percentage points to 82.7 percent on average, while daily raw coal output jumped by 9.1 percent week-on-week, Mysteel said in a separate note.
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