SINGAPORE: Iron ore futures rose on Thursday after two straight sessions of falls, buoyed by expectations of a pickup in China’s hot metal output as more steel mills resume production after maintenance. The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) climbed 0.96 percent to 792 yuan (USD113.99) a metric ton by 0308 GMT.
The benchmark March iron ore on the Singapore Exchange was 0.89percent higher at USD104 a ton. China’s hot metal output declined 7,000 tons week-on-week as several blast furnaces underwent maintenance, postponing their planned production resumption to next week, the Shanghai Metals Market (SMM) said in a note.
Hot metal production is expected to pick up, with low temperatures in China requiring mills to keep producing to avoid frozen drainage systems if ore supply is sufficient, SMM said in a separate note. However, traders are also wary of the Chinese government implementing environmental protection restrictions and conducting safety inspections in the run-up to the Lunar New Year holiday, which would impede steel production and temper demand for feedstocks, SMM said. Hangda Steel and Chengshi Steel have announced their maintenance plans and will suspend production for the month of February. Other steelmaking ingredients on the DCE gained, with coking coal and coke up 2.1 percent and 2.43percent, respectively.
Steel benchmarks on the Shanghai Futures Exchange rose. Rebar strengthened 0.77percent, hot-rolled coil firmed 0.46 percent, wire rod advanced 0.46 percent and stainless steel climbed 2.43percent.
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