Iron ore futures edged higher on Wednesday, with the Singapore benchmark contract vaulting past $120 a tonne to hit a fresh six-month peak, as concerns over supply added support to prices already boosted by brightening demand prospects in China.
Analysts said latest data showing lower iron ore shipment volumes particularly from Brazil and plunging cargo arrivals in China were also driving prices of the steelmaking ingredient higher.
Iron ore’s most-active May contract on China’s Dalian Commodity Exchange ended morning trade 1.7% higher at 848 yuan ($125.11) a tonne. On the Singapore Exchange, benchmark February iron ore rose as much as 0.7% to $120.85 a tonne.
“(Brazilian miner) Vale’s shipments have dropped significantly due to the impact of the rainy season,” Sinosteel Futures analysts said in a note.
Vale SA, one of the world’s largest iron ore producers, said last month it expected 2023 output to reach between 310 million and 320 million tonnes, flat compared with last year’s output forecast.
Global iron ore shipments in the first quarter are projected to decline also because of mine maintenance programmes and weather-related disruptions, analysts said.
Most steel benchmarks on the Shanghai Futures Exchange and other Dalian steelmaking inputs also rose, with coking coal and coke up 2% and 3%, respectively. Rebar climbed 1.2%, hot-rolled coil gained 0.9%, and wire rod added 0.5%.
But stainless steel fell 1.8%.
Dalian, Singapore iron ores up
Dalian iron ore has risen more than 40% from a low in November, while SGX prices have climbed more than 3% this month, propped up by the significant easing of pandemic controls in China and pledges of more policy support to economic growth.
Morgan Stanley and other investment banks have bumped up their China growth forecasts this year as the country rapidly dismantles two years of tight COVID-19 restrictions.
Comments
Comments are closed.