Iron ore futures in China climbed to their strongest in three weeks on Wednesday, supported by expectations for firm steel demand in the world's top consumer in the first half of the year. It marked the second straight session of sharp gains for the steelmaking raw material, with the price movements accompanied by low liquidity as many market players have taken off for the week-long Lunar New Year holiday that starts on Thursday.
The most-traded iron ore contract for May delivery on the Dalian Commodity Exchange jumped as far as 541 yuan ($85) a tonne, a level last seen on January 23. It closed up 2.6 percent at 539.50 yuan. Many steel mills have secured iron ore supplies ahead of the Spring Festival, said an iron ore trader in Beijing. "Many mills have good profit expectations for the first and second quarter so they have increased purchases of iron ore," he said.
The gains in Dalian iron ore futures add to Tuesday's 1.3 percent increase that helped spot prices recover some lost ground. Iron ore for delivery to China's Qingdao port rose 1.5 percent to $77.36 a tonne on Tuesday, its highest since January 12, according to Metal Bulletin. Prices of other steelmaking ingredients also advanced on Wednesday. Coking coal futures increased 1.1 percent to 1,373.50 yuan a tonne, and coke jumped 1.5 percent to 2,141.50 yuan.
The most-active May rebar on the Shanghai Futures Exchange rose 0.4 percent to end at 3,934 yuan per tonne, having touched a nearly one-week high of 3,951 yuan earlier in the session. US President Donald Trump said on Tuesday he was considering a range of options to address steel and aluminium imports that he said were unfairly hurting US producers, including tariffs and quotas.
A Chinese government think-tank warned earlier that "unfair and unreasonable" US trade measures on steel will be met with "counter-measures" under World Trade Organisation rules. The United States is the world's biggest steel importer, buying nearly 40 percent of shipments from Canada, Brazil and South Korea. China was not among the top 10 sources of US steel imports in January-September 2017 based on US Commerce Department data.
Comments
Comments are closed for this article.