MANILA: Chinese iron ore futures and other steelmaking inputs rose on Tuesday, as hopes of an improvement in demand rose on optimism that COVID-19 lockdowns will ease further, although traders still kept their upbeat expectations in check.
The most-traded September iron ore on China’s Dalian Commodity Exchange ended daytime trade 0.9% higher at 829 yuan ($122.62) a tonne, after earlier hitting the highest since May 6 at 849 yuan.
Shanghai, which has set out plans to end a painful COVID-19 lockdown that has bruised China’s economy, achieved on Tuesday a milestone of three consecutive days with no new cases outside quarantine zones. “The rapid decline of new infections is...noteworthy - but given concerns about low levels of natural immunity and less effective vaccinations, the risk is that relaxation of restrictions could lead to another wave in China,” analysts at J.P.Morgan said in a note. On the Singapore Exchange, iron ore’s most-active June contract dropped 1% to $128.65 a tonne by 0700 GMT. Robust blast furnace capacity utilization rates and daily offtakes from the country’s ports indicate that China’s iron ore demand has not collapsed despite the stringent lockdowns. Shrinking iron ore port inventories and latest data showing declining shipments from top suppliers Australia and Brazil also provided support to prices, analysts said.
Iron ore stockpiles at Chinese ports stood at 141.75 million tonnes, as of May 13, the lowest since October, according to data from SteelHome consultancy.
The benchmark 62%-grade iron ore’s spot price — for materials bound for China was $129.50 a tonne on Monday, up from Friday’s $127, according to SteelHome data. Dalian coking coal jumped 3.2%, while coke climbed 1.9%. Construction steel rebar on the Shanghai Futures Exchange edged up 0.1%, while hot-rolled coil gained 0.4%. Stainless steel shed 1.1%.
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