Iron ore futures rose on Wednesday, with the Dalian benchmark contract soaring to a record high, while Singapore prices advanced for a seventh straight session on strong demand for the steelmaking ingredient in top ferrous metals producer China.
The most-traded iron ore for January delivery on the Dalian Commodity Exchange gained as much as 2.8% to 928 yuan ($141.45) a tonne in early trade.
Iron ore’s most-active January contract on the Singapore Exchange jumped 1.7% to $129.43 a tonne.
Strong demand has propelled spot iron ore prices in China to the the highest level since January 2014 this week, trading at $131.50 a tonne on Tuesday, according to SteelHome consultancy data. SH-CCN-IRNOR62
“The iron ore market is indeed very bullish,” said Richard Lu, senior analyst at CRU consultancy in Beijing. “From a fundamental perspective, steel mills are now earning decent profits on steel sales.”
Comfortable margins will encourage Chinese steel mills to keep their blast furnaces operating “intensively” which, along with mills’ restocking demand, should maintain the buying momentum for iron ore, Lu said.
He also cited “port capacity constraints” in China that could hamper the flow of iron ore imports. Port stockpiles declined for two consecutive weeks to 130.3 million tonnes as of Nov. 27, following a five-month rise, SteelHome data showed. SH-TOT-IRONINV
“Strong steel production and retreating iron ore imports are stalling further rises in iron ore inventories,” said Daniel Hynes, senior commodity strategist at ANZ.
Sentiment across China’s ferrous metals markets has also been boosted by rising prospects of a swift global economic recovery from the pandemic on encouraging developments regarding potential COVID-19 vaccines.
Construction steel rebar on the Shanghai Futures Exchange rose 0.7% by 0243 GMT, while hot-rolled coil advanced 1.8% and stainless steel gained 0.7%.
Dalian coking coal climbed 2% and coke added 1.7%.
Source:Reuters
The opinions expressed herein are the author's and not necessarily those of The Xinde Marine News.
Please Contact Us at：
media@xindemarine.com
.gif)
