BEIJING: Benchmark iron ore futures in China gained for a fifth straight week, closing nearly 4% higher on Friday, fuelled by restocking demand at steel mills ahead of new year holidays.
China’s environment regulator helped boost sentiment with its spokesperson saying on Thursday that rumours about massive shutdown of industrial firms in northern area during the Winter Olympics were not true.
The most actively traded iron ore futures on the Dalian Commodity Exchange for May delivery closed 3.9% higher at 714 yuan ($112.11) per tonne, jumping 5% this week.
“Considering that the valuation of iron ore is lower than other ferrous metals, and the profitability at mills are relatively good, iron ore is expected to run stronger than steel products,” analysts with GF Futures wrote in a note.
Spot prices of iron ore with 62% iron content for delivery to China, however, dipped $2.5 to $125 a tonne on Thursday, data from SteelHome consultancy showed.
Coking coal futures on the Dalian bourse rose 4% to 2,327 yuan a tonne and coke prices advanced 3% to 3,169 yuan per tonne. They gained 5.9% and 3.9%, respectively, this week.
Capacity utilisation rates of blast furnaces at 247 steel plants across the country increased to 74.33% this week from 74.28% the week before, according to Mysteel consultancy.
Construction used steel rebar on the Shanghai Futures Exchange rose 1.6% to 4,519 yuan per tonne.
Hot rolled coils, used in the manufacturing sector, advanced 1.3% to 4,616 yuan a tonne.
Shanghai stainless steel futures, for February delivery, rose 2.6% to 16,880 yuan per tonne.