Dalian iron ore rises on restocking demand ahead of Lunar New Year

SINGAPORE: Dalian iron ore futures edged higher on Tuesday, supported by restocking demand among steelmakers in top consumer China ahead of the Lunar New Year holiday in February.

The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) was 0.24% higher at 823.5 yuan ($118.06) a metric ton, as of 0255 GMT.

The benchmark February iron ore on the Singapore Exchange was 0.26% lower at $108.9 a ton.

Though global iron ore shipments from Australia and Brazil decreased by 1.36 million tons week-on-week, the total volume arriving in China increased by 1.903 million tons, according to a January 13 report from consultancy Mysteel.

However, inventories still have room to grow, as stockpiles at 247 steel mills are lower compared to levels in past years, Mysteel data on January 12 showed.

Solid restocking demand ahead of the Lunar New Year is expected to provide strong support to ore prices, though high port inventory and ample spot supply may cap the upside, the Shanghai Metals Market said in a note.

Other steelmaking ingredients on the DCE were mixed, with coking coal and coke down 0.16% and up 0.2%, respectively.

Steel benchmarks on the Shanghai Futures Exchange were mostly bullish.

Rebar gained 0.28%, hot-rolled coil firmed 0.36% and stainless steel strengthened 0.18%.

Meanwhile, wire rod cooled 2.16%.