Posted on 14 Mar 2023
Iron ore futures climbed on Monday, with the Singapore benchmark rising back above $130 a tonne, as improving profitability of steel mills and demand outlook in top steel producer China lifted sentiment, although regulatory concerns capped gains.
The most-traded May iron ore on China’s Dalian Commodity Exchange ended daytime trade 0.5% higher at 929 yuan ($134.63) a tonne, after posting its fifth consecutive weekly gain on Friday.
On the Singapore Exchange, iron ore’s benchmark April contract was up 2.5% at $132 a tonne, as of 0730 GMT, hitting its highest since Feb. 21.
The rapid rise in steel mills’ profits and their output expansion have boosted iron ore demand, Sinosteel Futures analysts said in a note.
According to industry data and consultancy provider Mysteel’s latest survey of 247 Chinese steel mills, the overall blast furnace capacity utilisation rate edged up for the ninth straight week, rising another 0.89 percentage point on week to 88.03% over March 3-9.
Chinese steelmakers have resumed operations after regular maintenance works or ramped up production amid improving margins and brightening outlook for the domestic economy.
“It’s a relatively heavy week of economic data releases in China, which we believe should corroborate the country’s economic recovery in February,” Navigate Commodities Managing Director Atilla Widnell said.
China is scheduled to release this week a raft of data, including industrial production. It reported unexpectedly strong credit growth for February.
Chinese regulators, however, may take steps to curb surging iron ore prices, after the state planner suggested authorities should strengthen market supervision and crack down on misleading pricing information and hoarding.
Both rebar and hot-rolled coil on the Shanghai Futures Exchange climbed 1%. Wire rod was flat, while stainless steel dipped 0.5%.
On the Dalian exchange, coking coal and coke gained 1.7% and 0.7%, respectively.
Source:Reuters
