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Saturday, June 3, 2023

Iron ore extends recent climb

BEIJING: Dalian iron ore futures were set for a fourth straight session of gains on Thursday, supported by the prospect of demand recovery after steel consumption was temporarily capped by rainy weather in many regions last week.

The most-traded May iron ore futures contract on the Dalian Commodity Exchange (DCE) ended daytime trading 1.91% higher at 905.5 yuan ($131.64)a tonne, posting a week-on-week gain of 4.8%. Similarly, on the Singapore Exchange, the most-active May iron ore contract was 2.24% higher at $125.6 a tonne as of 0907 GMT, recording a rise of 7.5% week-on-week.

“Hot metal output still has some room for further growth in the short run, lending support to the upstream ore market,” analysts at Huatai Futures said in a note.

Interest in restocking raw materials depends on how steel demand actually performs and shrinking margins due to falling prices will cap room for iron ore price gains, they added.

Other steelmaking ingredients-coking coal and coke both regained lost ground in the afternoon, with the former rising 0.19% and the latter climbing 0.21%.

Steel futures prices were mixed. Rebar on the Shanghai Futures Exchange rose by 0.53% to 4,167 yuan a tonne, and hot-rolled coil went up 0.21%. Wire rod declined 0.3% and stainless steel shed 2.5%. “The market is still holding a strong expectation of economic recovery,” Everbright Futures analysts said in a note.

Despite continued price strength in the iron ore market so far this week, analysts warned of possible downside risks ahead as regulators may step out to rein in rapid price growth.

Iron ore extends recent climb

Source: Brecorder

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