- Dalian iron ore rises for fourth day, SGX iron ore up 0.5%
- Chinese mills’ steel stocks down for fifth week – Mysteel
- Updates prices, adds chart
March 26 (Reuters) – Asia’s benchmark iron ore futures advanced on Friday and headed for their first weekly jump in four, as declining steel inventories and rising demand in China lifted sentiment toward the steelmaking ingredient.
Stocks of the five major finished steel products held by 184 Chinese mills regularly surveyed by Mysteel consultancy slipped for the fifth week over March 18-24, declining by 3.3% on a weekly basis on robust domestic demand.
The steady decline in mills’ stocks signalled that the peak demand season in top steel producer China has set in, Sinosteel Futures analysts said in a note.
Iron ore on China’s Dalian Commodity Exchange DCIOcv1 ended the daytime trading session 2% higher at 1,088.50 yuan ($166.37) a tonne, rising for a fourth consecutive session. The benchmark contract has risen 0.6% in the week, despite Monday’s 4.5% slump.
On the Singapore Exchange, the benchmark contract SZZFJ1 rose 0.5% to $156.35 a tonne by 0703 GMT.
Spot iron ore rebounded to $162 a tonne on Thursday, according to SteelHome consultancy SH-CCN-IRNOR62, after hitting a six-week low earlier in the week due to concerns about smog-controlling output curbs in China’s steelmaking hub. (Full Story)
Despite recent losses, Asia’s iron ore benchmarks are still overvalued on a pure supply-demand basis, said Atilla Widnell, managing director at Navigate Commodities in Singapore.
“It’s been a beautiful sight to behold to actually witness Chinese iron ore and steel futures markets behaving rationally as they digest the consequences of capacity restrictions,” Widnell said.
“That said, it’s quite naive to think that China can simply cut back steel output by the scale it’s proposing in the short term, as it will be unable to source the sheer volumes needed to meet domestic consumption in 2021.”
Rebar on the Shanghai Futures Exchange SRBcv1 jumped 2.8%, while hot-rolled coil SHHCcv1 climbed 0.6%. Stainless steel SHSScv1 rose 0.8%.
Dalian coking coal gained 0.3% and coke DCJcv1 leapt 2.5%.
Source: Reuters (Reporting By Enrico Dela Cruz n Manila)