MANILA: Dalian iron ore futures jumped nearly 10% on Monday as the key steelmaking raw material extended a rally powered by bullish demand outlook for 2021 and growing concerns about supply.
Iron ore has emerged as the top-performing major commodity globally this year, having gained nearly 140%, which some analysts and traders have also attributed to huge speculative bets.
Iron ore on China's Dalian Commodity Exchange ended daytime trading up 9.7% at 1,144.50 yuan ($174.76) a tonne, after earlier hitting a contract high of 1,147 yuan.
A landslide at a mine operated by Vale SA killed one person on Friday, at a location near a mining dam operated by the Brazilian iron ore giant that burst in 2019 and killed hundreds, fuelling worries about operations.
Iron ore on the Singapore Exchange climbed 8.7% to record $176.20 a tonne.
Steel commodities on the Shanghai Futures Exchange and other Dalian steelmaking raw materials also climbed.
Top steelmaker China, which is projected to produce more next year compared with 2020, according to a government consultancy, has vowed to maintain policy support for its economic recovery.
"The market has optimistic expectations for next spring demand," analysts at Sinosteel Futures in Beijing said in a note.
"A large amount of risky funds" has also flowed into the market, driving prices higher, they said.
"Prices will remain above $100 a tonne until mid-2021, before easing gradually to around $75 by the end of 2022 as Brazilian supply recovers and Chinese stimulus eases back," the Australian government said in a quarterly outlook.
Spot iron ore surged to $164.50 a tonne on Friday, SteelHome consultancy's data showed, the highest on record.
Comments
Comments are closed for this article.