China iron ore futures bounce back after two days of falls

BEIJING: Benchmark iron ore futures in China bounced back on Thursday from two consecutive sessions of losses, gaining more than 3% in early trade as the demand outlook remains resilient for the steelmaking ingredient.

The most-traded iron ore futures on the Dalian Commodity Exchange, for May delivery, rose as much as 3.2% to 1,059 yuan ($162.11) per tonne and were up 1.2% at 1,039 yuan by 0248 GMT.

"The recovery of iron ore is more like a price fix after two days of plunges," said Tang Binghua, an analyst with Founder CIFCO Futures in

Beijing, adding that it was unlikely to see a general downtrend in the near term given the firm outlook for downstream consumption.

Spot prices of iron ore with 62% iron content for delivery to China

fell by $2 to $166 per tonne on Wednesday, according to SteelHome consultancy.

However, uncertainties stoked by a new coronavirus strain discovered in Britain still leave concerns over market expectations, according to Tang.

Steel rebar on the Shanghai Futures Exchange fell 0.4% to 4,292 yuan per tonne.

Hot-rolled coils eased 0.4% to 4,616 yuan per tonne, dropping for a second trading day.

FUNDAMENTALS

Dalian coking coal futures rose 0.7% to 1,627 yuan a tonne.

Coke rose 1.6% to 2,738 yuan per tonne.

Stainless steel futures, for February delivery, was up 0.8% at 13,405 yuan a tonne.

Brazilian iron ore miner Vale SA said on Wednesday its Samarco joint venture with BHP had begun the gradual restart of operations, after a deadly dam failure in 2015.

China Baowu Steel Group's steel production in 2020 has reached 100 million tonnes, state-run The Paper said on Wednesday, becoming the first Chinese steelmaker to ever hit that output milestone.