MANILA: China's iron ore futures rose more than 6% on Monday, as strong domestic demand for the steelmaking raw material and concerns over supply from key exporter Brazil lifted spot prices to their highest in 10 months.
The Dalian Commodity Exchange's most-traded iron ore for September delivery climbed as much as 6.4% to 775.50 yuan ($108.92) a tonne, the contract's highest since China launched its iron ore futures trading in 2013.
Dalian iron ore closed up 3.2%, extending its rally after a solid 20.1% gain last month, its biggest monthly rise since June last year. Iron ore on the Singapore Exchange was up 0.1% at $97.30 a tonne in afternoon trade.
China's steel inventories have steadily fallen since mid-March, encouraging steelmakers to ramp up output, which has boosted iron ore demand and prices. "Steel margins in China continue to trend higher, whilst there are concerns over Brazilian supply, amid the COVID-19 outbreak," commodity strategists at ING said in a note.
Iron ore drawdowns have brought stockpiles at the country's ports to 109.5 million tonnes, as of Friday, the lowest since November 2016, according to SteelHome consultancy data.
Benchmark 62% iron ore's spot price surged to $102.50 a tonne over the weekend, the highest since August 5, SteelHome data also showed.
Investors, meanwhile, have been on edge over iron ore supply from Brazil, which has recorded the second most coronavirus cases in the world after the United Sates.
Comments
Comments are closed for this article.