MANILA: Iron ore jumped on Thursday, despite renewed government focus on commodity inflation in top steel producer China, as benchmark steel futures in Shanghai stretched gains, lifting prices of steelmaking raw materials.
The most-traded iron ore for September delivery on China’s Dalian Commodity Exchange ended the morning trade 0.9percent higher at 1,180 yuan ($184.84) a tonne.
July iron ore on the Singapore Exchange rose 1.5percent to $207.90 a tonne.
The overall sentiment was positive with spot iron ore prices also extending gains, supported by strong fundamentals, analysts said.
The benchmark 62percent iron ore traded at $213 a tonne on Wednesday, the highest since May 19, based on SteelHome consultancy data, although buying interest was stronger in lower-grade but cheaper materials as steel profit margins in China have recently narrowed.
“We’re already seeing reports surface that mills in China have a reduced preference for higher-grade ore with steel mill margins down 75-85percent from peaks in mid-May,” said Vivek Dhar, commodities analyst at Commonwealth Bank of Australia.