BEIJING: Iron ore futures drifted higher on Thursday, as the focus shifted back to favourable fundamentals of firm near-term demand and lower supply, although intense trade tensions between the world’s two largest economies capped gains.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.99% higher at 713.5 yuan ($97.63) a metric ton as of 0256 GMT.
Earlier in the session, the contract hit 715 yuan, its highest since April 11.
The benchmark May iron ore on the Singapore Exchange was 0.57% higher at $98.75 a ton.
Iron ore slides on heightened Sino-US trade tension
Inclement weather-induced lower supply in the past quarter, coupled with remaining firm near-term demand, supported prices of the key steelmaking ingredient.
BHP Group reported slightly lower third-quarter iron ore output due to cyclones.
The other two giant miners Rio Tinto and Vale reported lower first-quarter shipments and output, respectively.
Meanwhile, daily crude steel output among member steel mills was around 2.2 million tons in the first ten days in April, 3.4% higher than the prior ten-day period, data from the state-backed China Iron and Steel Association showed.
China’s crude steel output in March jumped 4.6% to a ten-month high of 92.84 million metric tons.
Additionally, China’s openness to trade talks helped boost sentiment across the commodity complex, ANZ analysts said in a note.
China on Wednesday unexpectedly named a new trade negotiator, a key appointment that some market participants interpreted as a positive signal to potentially ease the escalating tariff war with the United States.
Other steelmaking ingredients on the DCE moved sideways, with coking coal down 0.98% and coke up 0.93%.
Steel benchmarks on the Shanghai Futures Exchange were mixed.
Rebar ticked 0.1% higher, wire rod added 0.3%, stainless steel advanced 0.27% while hot-rolled coil shed 0.22%.
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