BEIJING: China's iron ore bounced back on Wednesday after three consecutive sessions of declines, buoyed by expectations of an increase in restocking demand from downstream users next month.
The most-traded iron ore futures in the Dalian Commodity Exchange rose 0.9 percent to 463 yuan ($73.13) a tonne. It touched 453.5 yuan a tonne, the lowest level since Nov.3 in the previous session.
"Demand release came a bit later this year, which dampened the confidence of the market. But it is almost certain that demand at downstream sectors will recover in early April," said Wang Yilin, steel analyst at Sinosteel Futures.
Workers typically return to work a week after Chinese New Year celebration. In 2018, the country had its biggest national holiday in mid-February.
The most-active rebar contract for May delivery closed 0.6 percent down at 3,617 yuan a tonne, reversing early gains. In the previous session, the contract dipped to its weakest in nearly 5 months at 3,605 yuan a tonne.
Inventory of steel rebar rose to the highest level since 2013 at 9.79 million tonnes as of Monday, data compiled by SteelHome consultancy showed.
Spot steel prices fell 0.5 percent to 4,179.48 yuan a tonne on Tuesday, data at website of Mysteel consultancy showed.
"Steel stockpiles at traders' warehouses started to fall since last week, indicating that demand has already showed a sign of improvement," said Wang.
Coke futures on the Dalian Commodity Exchange rose 0.6 percent to 1,957 yuan, their biggest intraday gain since Feb. 26.
Coking coal contracts also climbed 0.4 percent to 1,291.5 yuan a tonne on Wednesday.
BMI Research on Wednesday raised the price forecast for coking coal between 2018 and 2020 to $180 per tonne from previous $160 tonne. However, it maintained that prices would edge lower in the second and third quarters of this year, curbed by a continued slowdown in steel production growth in China.
The world's No.1 steel producer accounts for two-thirds of the global coking coal consumption.
Iron ore for delivery to China's Qingdao port fell 4.2 percent to $66.94 a tonne on Tuesday, its lowest level in 3-1/2 months. The contract is on track for its worst month since September 2017, having plunged 15 percent so far this month.
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