MANILA: Dalian iron ore hit a record high on Friday and posted its fifth straight weekly gain, boosted by top consumer China's robust demand for the steelmaking ingredient and supply concerns, while prices in Singapore surged more than 6%.
Iron ore for January delivery on China's Dalian Commodity Exchange ended daytime trade 4.2% higher at 972 yuan ($148.79) a tonne, near its all-time high of 974 yuan hit earlier in the session. It gained 5.7% for the week.
Iron ore's January contract on the Singapore Exchange jumped 6.1% to $140.56 a tonne by 0714 GMT, rising for a ninth consecutive session. The rally has propelled seaborne and port iron ore prices in China to the highest in seven years. The benchmark 62% material traded at $136 a tonne on Thursday, based on SteelHome consultancy data.
Robust demand from Chinese steel mills as they continued to ramp up output stoked a rally that was further fuelled by disappointing forecasts by Brazilian miner Vale SA for its 2020 and 2021 production.
"Restocking by mills has been driving demand and this has made the market very sensitive to supply developments," commodity strategists at ING said in a note.
Imported iron ore stocked at 45 Chinese ports covered by Mysteel consultancy's weekly survey dipped for the fourth week over Nov. 27 to Dec. 3, down 1.6 million tonnes from a week earlier to about 124.5 million tonnes, mainly due to lower arrivals.
SteelHome consultancy had estimated stocks to be at 130.3 million tonnes as of November 27.
"Driven by profits, steel mills are not willing to actively reduce production," analysts at Sinosteel Futures said in a note.
Construction steel rebar on the Shanghai Futures Exchange rose 0.1%, while hot-rolled coil gained 1.1%. Stainless steel slipped0.4%.
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