SINGAPORE: Dalian iron ore futures touched their highest levels in more than a week on Monday, supported by improving short-term demand prospects for the steelmaking ingredient in top consumer China.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 0.5% higher at 706 yuan ($98.25) a metric ton.
Earlier in the session, prices rose to 709.5 yuan, their highest point since June 13.
The benchmark July iron ore on the Singapore Exchange was 0.36% higher at $93.85 a ton, as of 0717 GMT.
Hot metal production, a gauge of iron ore demand, inched up 0.24% week-on-week to 2.422 million tons, as of June 20, according to data from Chinese consultancy Mysteel.
“In the short term, hot metal production will remain stable, supporting prices for iron ore,” said broker Everbright Futures.
However, demand in China is entering the off-season, with construction material consumption already weakening, broker Galaxy Futures said.
Spring is typically the peak construction period ahead of the June rains, which have further dampened demand prospects.
Capacity utilisation rates for China’s electric-arc-furnace steelmakers fell 2.2% week-on-week to a three-month low of 54.5%, Mysteel said in a separate note, attributing the fall to persistent negative margins.
Also capping gains was a firmer greenback, with the dollar index climbing 0.12% on Monday on safe-haven bids.
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