BEIJING: Iron ore futures climbed for a sixth straight session on Tuesday, driven by mounting concerns over supply prospects from the giant Simandou project in Guinea, coupled with expectations of improving demand in top consumer China.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) closed daytime trade 2.03 percent higher at 805 yuan (USD112.98) a metric ton.
It touched the highest level since July 25 at 814 yuan earlier in the session. The benchmark October iron ore on the Singapore Exchange was 1.64 percent higher at USD107.15 a ton, as of 0800 GMT. The contract hit its highest level since February 25 at USD107.65 earlier.
Miner Rio Tito could be forced to build a refinery for the Simandou ore project in Guinea, Australia’s Financial Review reported on Sunday.
The giant iron ore project, with an annual production capacity of 120 million metric tons and first shipment expected in November, was seen weighing on prices in the coming years.
But the Guinea government’s intention to process ore locally may reduce the availability of ore being exported, supporting prices, said one analyst and one trader.
Focus is also on the pace of production resumption in the peak season in China and the corresponding restocking needs for raw materials, analysts at broker Shengda Futures said.
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