BEIJING: Iron ore futures prices extended their rise for a second straight session on Thursday, supported by lingering demand hopes in top consumer China, although some profit taking limited gains.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 1.03% higher at 879.5 yuan ($121.36) a metric ton, after rising more than 3% on Wednesday.
The benchmark May iron ore on the Singapore Exchange was 0.28% higher at $118.25 a ton, as of 0331 GMT, following an increase of more than 5% the day before.
Analysts at Soochow Futures said in a note that rising steel output and demand heightened expectations of growing hot metal output.
“The market had opted to trade the apparent construction steel demand data in advance, with some participants pegging it at 2.87 million tons, a rise of 65,000 tons from previous session,” analysts at Shengda Futures said in a note.
The price gains have slowed after the DCE on Wednesday unveiled plans to adjust trading volume of open positions with delivery in May and September for some clients to 500 lots from Friday to tame speculation.
Iron ore rebounds to six-week high
“Some investors closed their long positions to cash in profits after the announcement of trading limits, capping price rise today,” said Pei Hao, a Shanghai-based analyst at international brokerage Freight Investor Services (FIS).
Other steelmaking ingredients on the DCE advanced further, with coking coal and coke up 1.58% and 0.76%, respectively.
Steel benchmarks on the Shanghai Futures Exchange edged up. Rebar ticked 0.03% higher, hot-rolled coil added 0.18%, wire rod inched up 0.13% and stainless steel climbed 0.39%.
Although most downstream construction enterprises surveyed are holding low inventory and therefore showed certain willingness to restock steel products, the majority of them chose to delay the time of stockpiling, a survey from consultancy Mysteel showed on Wednesday.
Nearly 81% of surveyed enterprises expect steel prices to weaken after the May Day holiday break, according to Mysteel.
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