Iron ore ended the quarter higher on optimism about demand from China

Iron ore futures on the Dalian Stock Exchange rose on Friday and were headed for a second straight quarter of gains, boosted by expectations of an improvement in China’s steel demand in the second quarter and concerns over supply shortages provides further support.

The steel ingredient rebounded from last October’s lows as COVID-free easing and support measures for China’s struggling real estate sector brightened the economic recovery and steel demand outlook in the world’s largest iron consumer.

Expectations of improving Chinese demand, particularly for construction steel during the spring, and declining iron ore inventories at the port also boosted prices.

But global economic uncertainties and restrictions on steel production in China, coupled with warnings from Chinese regulators against excessive price speculation, capped iron ore’s gains.

May’s top-traded ore contract on China’s Dalian Commodity Exchange ended daytime trade up 1.2% at RMB 907 ($132.13) a ton and extended its quarterly gain to more than 6 %.

On the Singapore Stock Exchange, benchmark iron ore fell 0.2% to $125.10 a tonne in May. However, it was on track for a quarterly gain of about 10%.

“Iron ore prices continue to rise on signs of tighter supply ahead of seasonal demand increases in China’s peak construction period,” analysts at National Australia Bank said in a statement.

But the strength of China’s iron ore demand could ease in the second half of the year, with China seeking to reduce crude steel output again this year in line with its carbon emission reduction target, officials said. analysts.

China’s economic recovery also appears fragile.

Source: Terra

Rose

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