News

Iron ore prices soar over 10% on China pre-holiday buying

Issued at 2021-10-06



Iron ore futures rose on Thursday to their highest levels in three weeks on hopes of a recovery in Chinese demand for the steelmaking ingredient in the fourth quarter that has been hammered largely by steel production curbs since July.

The most-liquid Dalian iron ore, however, was set for its first quarterly loss in nearly two years and third consecutive monthly decline, having tumbled around 40% since hitting a record peak in mid-May.

The most-traded iron ore on China's Dalian Commodity Exchange DCIOcv1 soared as much as 10.7% to 758 yuan ($117.13) a tonne in early trade, its loftiest since Sept. 8.

Iron ore's most-active November contract on the Singapore Exchange SZZFX1 climbed 11.6% to $127.80 a tonne.

This week's gains in iron ore futures mirror the rebound in spot prices in China, the world's top steel producer, as restocking demand ahead of the nation's Golden Week holiday from Oct. 1 underpinned prices.

The benchmark 62%-grade material traded at a two-week high of $118.50 a tonne on Wednesday, based on SteelHome consultancy data SH-CCN-IRNOR62.

Still, the overall mood in Chinese metals markets remained cautious amid power curbs and shortages that have prompted production cuts in the world's top metals consumer, and the China Evergrande debacle.

"The power crunch is resulting in many steel mills having to cut production," ANZ senior commodity strategist Daniel Hynes said, citing industry data showing a 7.2% month-on-month decline in output in the first two weeks of September.

China's steel production limits would lead to nearly 89 million tonnes of iron ore demand lost in the second half of the year, he said.

Construction steel rebar on the Shanghai Futures Exchange SRBcv1 slipped 0.6%, while hot-rolled coil SHHCcv1 was flat. Stainless steel SHSScv1 slumped as much as 4.7%.

Dalian coking coal DJMcv1 rose 4.3% and coke DCJcv1 traded flat.

 

 

 


Source: Nasdaq.com



Related News