Chinese iron ore futures ended higher on Thursday, logging a monthly gain, as demand hopes improved after data showed manufacturing activity in the country expanded for a second straight month.
The most-traded September iron ore contract on the Dalian Commodity Exchange closed up 2.5% at 610 yuan ($86.38) per tonne. It notched a monthly gain of 5.35%.
The manufacturing Purchasing Managers' Index (PMI) was at 50.8 in April, China's National Bureau of Statistics said, as more businesses resumed work, although lockdowns and sliding global demand could hamper an economic recovery.
Prices were also supported by restocking demand ahead of Beijing resuming highway tolls from May 6, which will increase logistics costs.
"The exemption of highway tolls currently can reduce costs of iron ore transportation by 0.1-0.073 yuan per tonne in each kilometre," Tianfeng Futures wrote in a note, adding that volumes evacuated from ports may slump after the resumption.
Dalian coking coal jumped as much as 3.8% to 1,078 yuan a tonne and ended up 2.9% at 1,069 yuan.
Coke futures rose 2.5% to 1,693 yuan per tonne.
Financial markets in mainland China will be closed for the International Labour holiday between May 1 and May 5.
Spot prices of iron ore with 62% iron content for delivery to China were unchanged at $84 per tonne on Wednesday.
Construction rebar on the Shanghai Futures Exchange rose 2.2% to 3,367 yuan a tonne.
Hot-rolled coil increased 1.7% to 3,211 yuan per tonne.
Stainless steel inched up 0.8% to 12,990 yuan a tonne.
China's steel mills are rapidly cranking up output on rising profit margins and hopes that government stimulus will revive consumption, despite an overhang of inventories and a slowdown in global steel demand due to the coronavirus pandemic.
Comments
Comments are closed.