SINGAPORE: Iron ore futures struggled for direction on Friday as steady steel demand for construction countered prospects of rising supply of the steelmaking ingredient.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) was 0.32percent higher at 787.5 yuan (USD115.19) a metric ton, as of 0303 GMT.
The contract has gained 1.22percent so far this week. The benchmark May iron ore on the Singapore Exchange was up 0.1percent at USD106.8 a ton, gaining 0.95percent so far in the week.
Chinese supply of finished steel products rose by 78,900 tons, or 0.9percent, week-on-week, while inventory declined by 621,200 tons, or 3.5percent, according to data from consultancy Mysteel.
The increased consumption of steel products was primarily driven by the construction industry, indicating steady demand for steel and feedstock.
Restocking prior to China’s five-day May Day also supported prices. Weighing on the iron ore market, the resolution of a months-long dispute over BHP’s supply contract with China Mineral Resources Group (CMRG) raised prospects of more shipments to the world’s largest consumer.
In company news, Australian miner Fortescue posted a 5percent rise in third-quarter iron ore shipments, driven by strong performance of its hematite operations and higher contribution from the Iron Bridge project.
The world’s fourth-largest iron ore miner shipped 48.4 million metric tons (Mt) of iron ore in the three months ended March 31, compared with 46.1 Mt reported a year earlier.
Crude steel output from China, the world’s top producer and consumer of the metal, fell 6.3percent to 87.0 million tons in March, World Steel Association data showed on Thursday.
Other steelmaking ingredients on the DCE fell, with coking coal and coke down 0.12percent and 0.94percent, respectively. Steel benchmarks on the Shanghai Futures Exchange were mixed.
Rebar gained 0.009percent, hot-rolled coil lost 0.06percent, wire rod advanced 0.28 percent and stainless steel advanced 1.65percent.
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