Shanghai: Dalian iron ore rose nearly 4% on Wednesday, after five straight sessions of losses, tracking steel futures as China’s output curbs fuelled worries about supply.
The most-traded iron ore for January 2022 delivery on China’s Dalian Commodity Exchange ended daytime trading up 3.7% at 871.50 yuan ($134.33) a tonne, after hitting its lowest since March 26 in the previous session.
Iron ore’s most-active September contract on the Singapore Exchange rose 2.4% to $163.80 a tonne by 0728 GMT after a wobbly morning session.
Shanghai steel futures rose for a second day to their highest level in nearly two weeks on supply worries.
Mills in top steel producer China, which have been asked to reduce output starting July to limit full-year production to no more than the 2020 volume in order to cut emission levels, are facing the prospects of prolonged restrictions.
The ongoing curbs have dampened iron ore demand, bringing spot prices to the lowest levels in more than four months. The restrictions may be extended until early next year, and possibly even intensified ahead of the Beijing Winter Olympics in February. A draft plan on controlling air quality in the steel hub Tangshan city during the games has been circulating online.
“Pressure remains on iron ore futures in China amid fear that restrictions on steel output will last longer than expected,” said ANZ senior commodity strategist Daniel Hynes. Tangshan will extend steel production curbs until March 13 to ensure good air quality for the games, he said.
Construction steel rebar on the Shanghai Futures Exchange rose 2.4% and hot-rolled coil advanced 1.7%. Stainless steel edged up 0.1%.
Dalian coking coal slipped 0.4%, while coke jumped 3.1%.
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