SINGAPORE: Iron ore futures prices advanced for a fourth straight session on Monday, buoyed by strong buying of medium-grade cargoes, though gains were capped by year-end blast furnace maintenance.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) rose 0.88 percent to 799 yuan (USD112.95) a metric ton by 0320 GMT. The benchmark January iron ore on the Singapore Exchange was 0.88 percent higher at USD103.1 a ton. China’s blast-furnace steel output edged lower last week as some mills began annual maintenance, with capacity utilisation down 0.6 percentage point, according to data from consultancy Mysteel.
Despite weakening fundamentals, iron ore prices were supported by strong demand for medium-grade ores, Mysteel said. Overseas iron ore supply is expected to keep recovering in December, while weak blast furnace margins and heavier year-end maintenance point to further declines in pig iron output, broker Everbright Futures said. European Union governments have called on the US to remove the 50percent steel and aluminium tariffs it introduced in August on 407 ‘derivative’ products such as wind turbines and motorcycles, or else the EU would retain its tariffs on such US products until a solution is found.
Total stockpiles of iron ore in ports across China dipped 0.42percent week-on-week to about 139 million tons, as of November 28, according to SteelHome data. On Friday, China unveiled plans to expand the public real estate investment trust market to include commercial properties, after developer China Vanke’s bonds and stocks plunged to record lows last week, rekindling worries about a spillover effect for the broader property sector.
Other steelmaking ingredients on the DCE gained ground, with coking coal and coke up 1.88 percent and 2.03 percent, respectively. Steel benchmarks on the Shanghai Futures Exchange increased. Rebar and hot-rolled coil both gained 1percent, wire rod firmed 0.51 percent and stainless steel climbed 0.85 percent.
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