MANILA: Dalian iron ore breached the 1,000-yuan mark on Wednesday on optimism over demand for the steelmaking raw material and as traders fretted about supply in top steel producer China due to some disruptions in Australia.
The most-traded May iron ore contract on China’s Dalian Commodity Exchange ended daytime trading 2.9% higher at 1,007.50 yuan ($154.10) a tonne.
Iron ore on the Singapore Exchange rose 1% to $154.83 a tonne by 0720 GMT.
“From the fundamentals perspective, steel margins are still good, at least for industrial materials including hot-rolled coil,” said Richard Lu, senior analyst at CRU Group in Beijing. “That’s why the Chinese hot metal production is elevated, despite a marginal fall in recent weeks due to mill maintenance and stricter operating restrictions in some regions,” he said.
Iron ore arrivals to China are expected to slow down, Lu added, citing some disruptions in Australia, resulting in a somewhat tight market.
Mysteel consultancy’s latest survey showed iron ore dispatched from Australia and Brazil fell for the second week over Dec. 7-13 by another 1 million tonnes from the prior week. Iron ore shipments to China from Australia and Brazil fell by about 800,000 tonnes in the week ending Dec. 11 from the previous week, Refinitiv data showed. The Dalian benchmark breached the 1,000-yuan mark last week for the first time ever on strong speculative interest in iron ore. China’s steel producers have called for a regulatory probe into the skyrocketing prices and a crackdown on any wrongdoing.
Spot iron ore steadied at $156.50 a tonne on Tuesday, based on SteelHome consultancy data, near an almost eight-year peak hit on Friday.