BEIJING: Iron ore futures prices rose on Wednesday to hit their highest in more than two weeks, helped by remaining firm demand in top consumer China and its falling home supply.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) rose 0.89percent to 792.5 yuan (USD111.49) a metric ton, as of 0240 GMT, its highest since November 3.
The benchmark December iron ore on the Singapore Exchange was up 0.19percent at USD104.6 a ton, as of 0230 GMT, after touching its highest since November 4 at USD104.7 earlier in the session. Chinese steel mills have been adopting a low-inventory strategy for raw materials in the past three years as margins have been squeezed by falling steel prices amid a protracted property downturn, said analysts and traders.
But that means mills need to return to the spot market to restock cargoes more frequently, thus improving spot liquidity, which to some extent acted as a buffer amid a price slump.
Lower domestic supply has also been supporting ore prices. China’s domestically produced run-of-mine, which is raw ore to be processed into concentrate for pellet, slid by 2.9percent from the year before to 84.03 million tons in October, official data showed on Tuesday. However, analysts cautioned that further upside potential for ore prices might be limited, citing high portside inventories and forecasts of growing supply of seaborne cargoes.
Other steelmaking ingredients coking coal and coke, fell 2.09 percent and 1.23 percent, respectively. Most steel benchmarks on the Shanghai Futures Exchange gained ground. Rebar edged up 0.03 percent, hot-rolled coil advanced 0.18 percent, wire rod added 0.45 percent while stainless steel was little changed.
Comments
Comments are closed for this article.