Iron Ore Futures Surges On Improving Downstream Demand

BEIJING:On Tuesday, Dalian and Singapore iron ore futures rose as the market focused on improving fundamentals and warmer weather raised expectations for a pickup in steel demand.

After losing 2.13 percent on Monday, the most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) was up 1.11 percent at 907.5 yuan ($130.86) per tonne at 0200 GMT.

The benchmark April iron ore up 1.41 percent at $126.05 per tonne on the Singapore Exchange. According to Pei Hao, an international brokerage firm’s senior analyst based in Shanghai, “the expectation of continuously recovering downstream (steel) demand is the primary driver of the rise in prices for iron ore.”

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Concerns that authorities might take measures to stem rising prices following a government meeting on Friday had put pressure on the market. Pei stated, “It appears that the fundamental factors have resum to play a dominant role.”

Everbright Futures stated in a note that the average capacity utilisation rate of concrete and transaction volumes of construction steel products have recently increased, indicating a recovery in the downstream steel consumption sectors.

The China Iron and Steel Association stated on its official website on March 6 that China anticipated to have produced approximately 2.69 million tonnes of crude steel per day over the 21-28 of February, an increase of 5.16 percent from the previous 10-day period. Coking coal and coke, two additional raw materials used in the production of steel, also achieved some gains.

Coke and coking coal both increased by 0.09 percent. A report from consultancy Mysteel stated that some domestic coking plants increased their coke offer prices by one hundred yuan per tonne beginning on March 7.

Also Read : Price Of Base Metals Drop As China Sets Modest Growth Target

On the Shanghai Futures Exchange, rebar went up 0.64 percent to 4,240 yuan a tonne, hot-rolled coil went up 0.44 percent, and wire rod went up 0.71 percent. Stainless steel lost 0.31 percent.