Iron ore futures on the Dalian Stock Exchange hit an eight-month high on Friday, boosted by favorable fundamentals and optimism about future steel demand.
May’s top-traded iron ore futures contract on the Dalian Commodity Exchange (DCE) finished the day trade up 1.04% at RMB 919 ($133.15) a ton, the highest since July 2022.
On the Singapore Stock Exchange, April’s benchmark iron ore rose 0.1% to $126.5 a tonne.
Steel mills are ramping up production but their iron ore inventories are relatively low, supporting commodity prices, said a Shanghai-based iron ore trader, who requested anonymity because he is not allowed to speak. with the media.
The blast furnace operating rate of 247 steel mills surveyed across China stood at 81.07 percent on March 3, up 6.35 percent year on year, according to data from consulting firm Mysteel.
Iron ore inventories at the port, however, fell by 2.23 million tonnes for the week to around 140 million tonnes, the data showed.
Steel prices aren’t rising as much as commodity prices, leaving steel mills struggling to turn a profit, says a Shanghai-based iron ore analyst.
Rising steel production will also prevent steel margins from improving, analysts at Huatai Futures said in a statement.
Expectations of higher demand from steel mills supported coke prices, while higher supply prospects overseas temporarily weighed on metallurgical coal. Coke gained 0.46%, while metallurgical coal fell 1.01%.
Steel futures prices have been on an upward trend. Rebar on the Shanghai Futures Exchange rose 1.26% to RMB 4,272 a ton, hot rolled coil gained 1.34% and stainless steel gained 0.8%. Wire rod fell by 0.1%.
Source: Terra
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