MANILA: Iron ore futures rose on Tuesday, mirroring upbeat sentiment in Chinese equities and base metals markets, shrugging off Brazilian miner Vale SA's higher output in the second quarter.
Iron ore on the Dalian Commodity Exchange closed 2.8% higher at 841 yuan ($120.32) a tonne, after falling for three straight days.
On the Singapore Exchange it advanced 2.4% to $108.60 a tonne in afternoon trade, rebounding from a four-day decline.
China stocks rose 3% on Monday and were headed for further gains after regulators moved to bolster the market by lifting equity investment cap for insurers and encouraging mergers and acquisitions among brokerages and mutual fund houses.
The steelmaking ingredient continues to defy fundamentals, with the Dalian benchmark contract on track for its fifth straight month of gains, and spot prices hovering near one-year highs, prompting analysts to warn of a sharp correction.
"A recovery in shipments from Vale and rising ore stocks in China's ports point to an imminent correction," analysts at Morgan Stanley wrote in a note dated July 19.
Vale's second-quarter iron ore production grew 5.5% from a year earlier and was 13.4% higher compared with the first quarter, despite the impact of the novel coronavirus.
Another major iron ore producer, BHP Group said fourth-quarter output rose 7% to a record high, but warned that the resurgence of COVID-19 outbreak threatened the short-term demand outlook.
Comments
Comments are closed for this article.