BEIJING: Dalian and Singapore iron ore futures rose on Tuesday, as warmer weather raised expectations for a pickup in steel demand and the market focused on improving fundamentals.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) was up 1.11% at 907.5 yuan ($130.86) a tonne, as of 0200 GMT, after a 2.13% fall on Monday.
On the Singapore Exchange, the benchmark April iron ore was up 1.41% at $126.05 a tonne. “The rise in (iron ore) prices is primarily driven by expectation of continuously recovering downstream (steel) demand,” said Pei Hao, a Shanghai-based senior analyst from FIS, an international brokerage firm.
The market had been under pressure on concerns that authorities could take action to curb rising prices following a government meeting on Friday. “Now, it seems that the fundamental factors have begun to play a dominant role again,” said Pei.
The average capacity utilisation rate of concrete and transaction volumes of construction steel products have increased recently, indicating a recovery in the downstream steel consumption sectors, Everbright Futures said in a note.
China was expected to have produced approximately 2.69 million tonnes of crude steel per day over Feb. 21-28, a rise of 5.16% from the previous 10-day period, the China Iron and Steel Association said on its official website on March 6. Other steel-making raw materials coking coal and coke also managed to record some gains.
Coking coal rose 0.2% and coke nudged up by 0.09%. Some domestic coking plants raised their coke offer prices by 100 yuan a tonne from March 7, consultancy Mysteel said in a report.
Rebar on the Shanghai Futures Exchange climbed 0.64% to 4,240 yuan a tonne, hot-rolled coil gained 0.44% and wire rod rose 0.71%. Stainless steel fell 0.31%.
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