Iron ore futures in China surged nearly 6 percent to their highest in more than three years on Monday, tracking firmer steel prices as investors bet demand for the building material would remain strong.
Both commodities stretched last week’s gains and traders said the uptrend could continue in the short term.
“Mills’ booking orders are quite good and they’re trying to produce as much as possible,” said an iron ore trader in Shanghai.
“People are expecting demand in the spring will be strong.”
The most-active rebar on the Shanghai Futures Exchange was up 4.1 percent at 3,428 yuan ($498) a tonne by 0302 GMT. It earlier rose as far as 3,441 yuan, its loftiest since December last year.
Iron ore outpaced the construction steel product, with the most-traded contract on the Dalian Commodity Exchange climbing as much as 5.8 percent to 706.50 yuan a tonne, its highest since December 2013. It was last up 5.5 percent at 704.50 yuan.
Chinese steel mills were also replenishing their stocks of iron ore after the Lunar New Year break earlier this month, traders said.
China said it would continue to push its “One Belt, One Road” initiative – promoting infrastructure projects along historical land and sea trade routes – and deepen cooperation with countries along the belt.
The country will also invest over one trillion yuan ($145.30 billion) in transport in 10 mid-west provinces this year as part of a poverty-reduction plan, the Economic Information Daily newspaper reported, citing the local government.
Iron ore for delivery to China’s Qingdao port jumped 3.3 percent to $86.62 a tonne on Friday, its strongest since August 2014, according to Metal Bulletin.
Source: ReutersPrevious Next