BEIJING: Iron ore futures prices extended gains for a second straight session on Wednesday, aided by falling shipments and resilient demand, although mixed factory data in top consumer China curbed gains.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 0.68% higher at 736.5 yuan ($102.57) a metric ton, as of 0250 GMT.
The benchmark August iron ore on the Singapore Exchange was up 0.34% at $96.1 a ton, as of 0240 GMT. Iron ore shipments from top suppliers, Australia and Brazil, have fallen after the flurry of ramp-up by the end of the past quarter, analysts at Everbright Futures said.
Analysts at Galaxy Futures noted that ore prices will find some support from the supply side. “Despite slight fall, hot metal output still sat at a relatively high level and steel consumption from the manufacturing sector remains strong,” Galaxy’s analysts added. Hot metal output is typically used to gauge iron ore demand. But gains were limited after data showed China’s consumer prices rose for the first time in five months in June, while its producer deflation deepened to its worst level in almost two years.
The world’s second-largest economy is still grappling with uncertainty over a global trade war and subdued demand at home, piling pressure on policymakers to roll out more support measures. Other steelmaking ingredients on the DCE gained ground, with coking coal and coke up 1.55% and 1.06%, respectively.
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