SINGAPORE: Iron ore futures prices advanced on Monday, as blast furnace steel production increased amid rising demand for building materials ahead of the National Day holidays.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 1.12% higher at 814.5 yuan ($114.50) a metric ton, as of 0233 GMT.
The benchmark September iron ore on the Singapore Exchange was 0.09% higher at $105.8 a ton.
Production among Chinese blast furnace steel producers continued to increase overall in the week ended September 18, rising by 0.2 percentage points to 90.4%, largely due to the resumption of operations in North China, according to Chinese consultancy Mysteel.
Iron ore set for weekly gain on improved steel demand
Their combined hot metal output, an indicator of iron ore demand, also grew by 0.2% from the prior week to 2.41 million tons per day.
Demand for building materials is rising, supported by ongoing inventory reductions and increased downstream restocking ahead of the Chinese National Day holidays, said broker Hexun Futures.
Total iron ore stockpiles across ports in China fell 0.42% week-on-week to about 132 million tons as of September 19, according to Steelhome data.
Broadly, China kept its benchmark lending rates unchanged for the fourth consecutive month in September, despite signs of domestic slowdown.
Global crude steel production stood at 150.1 million tons in July, down 1.3% year-on-year, with Chinese output 4% lower at 79.7 million tons, according to data from the World Steel Association.
Other steelmaking ingredients on the DCE were mixed, with coking coal up 0.82% and coke down 0.14%.
China’s coal imports climbed to an eight-month high in August, supported by higher domestic prices. However, volumes remained 7% lower than a year earlier on weak demand and higher domestic supply.
Steel benchmarks on the Shanghai Futures Exchange all gained ground. Rebar rose 1.08%, hot-rolled coil strengthened 0.74%, wire rod inched up 0.24% and stainless steel increased 0.58%.
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