Iron ore inches higher after six-day slide

SINGAPORE: Iron ore futures inched higher on Monday after a six-session slide to a one-month low, as surging oil prices and higher feedstock demand supported prices.

The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) rose 0.4% to 757 yuan ($110.79) a metric ton by 0258 GMT.

The benchmark May iron ore on the Singapore Exchange was 0.12% higher at $103.6 a ton. Iron ore inventory at major Chinese ports declined by 0.16% week-on-week, as of April 10, data from consultancy Steelhome showed.

Continued portside destocking and rising hot metal output keep prices supported, according to consultancy Mysteel.

Imported iron ore declined by 536,100 tons at 47 Chinese ports on Australian supply disruptions, data from Mysteel showed. However, imports are expected to improve this week as supply disruptions have eased.

Oil prices jumped above $100 a barrel on Monday as the US Navy prepared to block ships from reaching Iran via the Strait of Hormuz, a move that could restrict Iranian oil exports, after Washington and Tehran failed to reach a deal to end the war.

Elevated oil prices are expected to lend support to iron ore prices, as they increase shipping costs.

In news, Brazilian miner Vale will begin building this year a processing plant in southeastern Minas Gerais state for tailings and waste rock, the company said on Friday.

The plant, which will have a capacity to produce up to 2 million tons of iron ore annually and is expected to begin operations next year, is part of the company’s goal to reuse previously discarded raw materials.

Other steelmaking ingredients on the DCE gained ground, with coking coal and coke up 0.19% and 0.34%, respectively.

Steel benchmarks on the Shanghai Futures Exchange were mixed.

Rebar and wire rod were little changed, hot-rolled coil climbed 0.15%, and stainless steel jumped 1.04%.