Futures prices of steelmaking ingredients in China rose on Monday, with iron ore jumping more than 4% and coke scaling a 12-month high, on strong demand as the world’s top steel producer continues to ramp up output.
The most-traded iron ore contract for September delivery on China’s Dalian Commodity Exchange rose as much as 4.3% to 873.50 yuan ($125.24) a tonne in early trade.
Iron ore’s September contract on the Singapore Exchange climbed 2% to $108.08 a tonne.
Dalian coke for September delivery gained 3% to 2,032 yuan a tonne, the highest since July 29 last year.
“The average daily molten iron output of steel mills reached a new high, reaching 2.5 million tons, mainly due to the recent resumption of production of blast furnaces in some areas,” analysts at Sinosteel Futures Co Ltd in Beijing said in a note.
Chinese steel mills remain profitable despite higher costs of raw materials, encouraging them to keep blast furnaces running at increased rates, they said, adding that they saw “strong support” for coke, which is used in iron ore smelting.
FUNDAMENTALS
* Coke stockpiles at 110 Chinese steel mills covered by Mysteel’s weekly survey rose 2% on week to a six-month high of 5 million tonnes as of July 30, according to data from the consultancy.
* Construction steel rebar on the Shanghai Futures Exchange rose 2.3%, while hot-rolled coil jumped 2.7% and stainless steel advanced 1.8%.
* Coking coal was up 1.2%.
* Benchmark spot 62% iron ore in China settled at 109.50 a tonne on Friday, staying near a 12-month high despite easing concerns about supply, SteelHome consultancy data showed. SH-CCN-IRNOR62
* Dalian iron ore posted its fifth straight monthly gain in July as China’s post-lockdown economic activity continued to improve, while hopes of more government support for its economy also remained high.
Source:Reuters
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