Iron-ore scales over three-week high on China demand, supply risks

11th June 2021

By: Reuters

  

Font size: - +

Iron-ore futures jumped on Friday to their highest in more than three weeks, as a rebound in steel inventory in top producer China suggested that demand for the raw material remained brisk.

The most-traded September iron ore on China's Dalian Commodity Exchange rose as much as 4.1% to 1 226 yuan ($191.96) a tonne, its loftiest since May 19, and was set for a second consecutive weekly rise.

The July iron ore contract on the Singapore Exchange climbed 2.8% to $214 a tonne, rising for a fourth straight session to its strongest since May 13.

"Iron ore futures extended gains as sentiment remained buoyed by signs of strong demand in China," said ANZ senior commodity strategist Daniel Hynes.

Stocks at 184 Chinese steel mills covered by Mysteel consultancy's weekly survey stood at 6.04 million tonnes as of Wednesday, up 2.7% from last week partly due to increased output, it said.

Concerns over tight global iron ore supply also supported prices, with seaborne cargoes and portside materials in China trading at the highest since May 19 above $200 a tonne.

China's iron ore port inventory hit a four-month low last week, while weekly shipment arrivals fell.

Adding to supply concerns, Brazil's Vale SA halted production at two mines and decommissioned a dam over safety concerns.

"This could further delay the recovery in iron-ore output in Brazil," Hynes said.

The rally in China's ferrous materials complex resumed despite the government reiterating its resolve to rein in commodity inflation and vowing to step up price monitoring and market supervision.

Construction steel rebar on the Shanghai Futures Exchange rose 2.9% by 0330 GMT, while hot-rolled coil advanced 2.5%.

Shanghai stainless steel gained 4% amid low stocks in China.

Dalian coking coal climbed 3%, while coke jumped 2.1%.

Edited by Reuters

Comments

The functionality you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION