SINGAPORE: Prices of Dalian iron ore futures edged higher on Thursday, supported by pre-holiday restocking activity.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) was 0.37 percent higher at 806.5 yuan (USD113.19) a metric ton, as of 0255 GMT. The benchmark September iron ore on the Singapore Exchange was 0.14 percent lower at USD105.55 a ton.
The market is closely watching the fallout from a contract dispute between China and leading miner BHP after state trading agency China Mineral Resources Group advised steel mills to halt purchases of BHP’s Jinblebar blend fines - a key iron ore product commonly used in Chinese sintering operations, said analysts from ANZ.
Typhoon Ragasa might have impacted demand at some construction sites in South China, though it may recover after the Chinese National Day holiday as weather conditions improve, said broker Galaxy Futures.
High levels of hot metal production, a gauge of iron ore demand, provide a window for pre-holiday restocking, offering support to ore prices, said Chinese broker Hexun Futures.
Still, end-user demand during the golden September-October period remains to be seen, with steel mill profits under pressure, Hexun said.
Global crude steel production in August rose 0.3 percent year-on-year to 145.3 million tons, according to World Steel Association data, while crude steel output from top producer and consumer China fell 0.7 percent.