Iron ore futures rise on strong Chinese export data, sustained demand
IRON ore futures gained on Friday (Dec 8), buoyed by robust export data from China, positive updates from major producers and persistently upbeat demand.
The most-traded May iron ore on China’s Dalian Commodity Exchange rose 2.6 per cent to 965.5 yuan (S$181.22) per metric tonne as of 0320 GMT.
The benchmark contract has risen 4.5 per cent in the week so far, and is on track to record its best week in five.
On the Singapore Exchange, the benchmark January iron ore was up 1.2 per cent at US$133.9 a metric tonne.
China’s exports grew for the first time in six months in November, suggesting factories in the world’s second-largest economy are attracting buyers through discount pricing to get over a prolonged slump in demand.
The country’s iron ore imports in November climbed 3.4 per cent from October, customs data showed on Thursday, as improved steel mill margins and a rebound in the yuan underpinned buying of the key steelmaking ingredient.
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Brazilian miner Vale, one of the world’s largest iron ore producers, held its production target for the second straight year, as it counts on stronger-than-expected Chinese demand.
Rio Tinto on Wednesday brought forward the start of production from its giant Simandou iron ore project to a year earlier, which will add around 5 per cent to global seaborne supply.
“The stable output guidance from major producers would continue to support the upward rally of the raw material prices next year as well, given the expectations of recovering downstream demand,” ING analysts said in a report on Wednesday.
Steel benchmarks on the Shanghai Futures Exchange were mixed. The most-active rebar contract strengthened 1.2 per cent, hot-rolled coil grew 1.8 per cent, and stainless steel gained 1 per cent. Meanwhile, wire rod decreased 0.3 per cent.
Among other steelmaking ingredients, Dalian coking coal was down 1.3 per cent and coke was up 0.7 per cent. REUTERS
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