China's iron ore futures ended a wobbly session higher on Friday and gained the most this week since September amid renewed concerns over seaborne supply and despite demand disruptions due to the coronavirus outbreak.
Iron ore on China's Dalian Commodity Exchange rose 1.0% to 628.50 yuan ($90.01) a tonne, advancing for a fourth straight day, and climbed 6.4% from last week. Singapore iron ore was steady at $86.04 in afternoon trade.
Despite weak demand for the steelmaking raw material in top steel producer China, spot prices extended gains to hit fresh three-week highs on Thursday, with the benchmark 62% grade settling at $88.50 a tonne, SteelHome consultancy data showed.
Traders at Chinese ports were reluctant to sell iron ore at low prices, metals data provider MySteel reported, after Brazilian miner Vale SA on Tuesday scaled down its first-quarter production outlook following heavy rains that hampered operations.
Traders were also hopeful of further stimulus support for the economy, as the coronavirus outbreak showed no sign of peaking, with more than 5,000 new cases added to the tally on Friday.
China's steel industry is already feeling the pain from sluggish demand amid disruptions to economic activity and restrictions on transportation to restrain the epidemic.
Its severity suggests disruptions "will continue for some time", Britain-based brokerage SP Angel said in a note.
Steel stocks are rising rapidly as resumption of work at factories and construction sites hinges on the success of virus containment efforts, Sino-Steel Futures Co Ltd in Beijing said in a note.
Companies responsible for 60% of Chinese steel production are located in regions where a directive was given to delay the restarting of operations, according to Justin Smirk, senior economist at Westpac Economic Research in Sydney.