MANILA: Dalian iron ore futures climbed to a two-month high on Monday, as portside inventory in top steel producer China shrank during the Golden Week holidays to the lowest since mid-July.
Adding to supply concerns, threats of flooding remained in Australia China’s biggest iron ore supplier - as authorities warned of another intense weather system that could bring more downpours.
The most-traded January iron ore on the Dalian Commodity Exchange ended morning trade 2.7% higher at 743 yuan ($104.45) a tonne, after touching 744.50 yuan earlier in the session, its highest since Aug. 9. On the Singapore Exchange, benchmark November iron ore rose as much as 2.4% to $96.35 a tonne. Dalian coking coal climbed 4.8% and coke gained 4%.
On the Shanghai Futures Exchange, rebar rose 1.6%, while hot rolled coil advanced 1%. Imported iron ore stocks at Chinese ports stood at 131.9 million tonnes, as of Monday, declining steadily over the last four weeks as steelmakers ramped up output amid increased construction-related demand for steel, SteelHome consultancy data showed.
Chinese steel prices are likely to rebound in October with market fundamentals improving and macroeconomic support policies coming into force, Mysteel consultancy said, citing its chief analyst Wang Jianhua.
Caution is likely to prevail, however, ahead of this month’s Chinese Communist Party congress. “The National Party Congress is set to commence in less than a week, with traders eagerly watching any and all policy announcements around the critical event,” Westpac analysts said in a note.