Chinese iron ore futures edged higher alongside steel prices on Tuesday, with most steel producers done with replenishing stocks ahead of the week-long Lunar New Year holiday.
Fellow steelmaking raw material coke rose to a six-week high, supported by transport disruptions due to heavy snow in China.
The most-traded iron ore contract for May delivery on the Dalian Commodity Exchange was up 0.4 percent at 521.50 yuan ($83) a tonne by 0223 GMT.
The most-active May rebar contract on the Shanghai Futures Exchange rose 0.2 percent to 3,954 yuan per tonne.
“Most of the mills have already procured enough raw material, so there’s very little trading activity going on,” said an iron ore trader at the port city of Rizhao.
He said some traders have also gone on holiday ahead of the week-long Chinese New Year that starts on Feb. 15.
“After the holiday mills should come back to the market and restock, so I expect prices won’t go down in one or two weeks after the Spring Festival,” he said.
Iron ore demand in China’s northern parts had been dented by steel production curbs across 28 cities since mid-November as Beijing fights smog. The curbs are in place until mid-March.
Stocks of iron ore at China’s ports hit a record 154.43 million tonnes on Jan. 19, although they have since eased to 152.58 million tonnes last week as some mills replenished their own inventory, according to data tracked by SteelHome consultancy. SH-TOT-IRONINV
Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB climbed 1.8 percent to $75.70 a tonne on Monday, according to Metal Bulletin, following a 2.5 percent spike in Dalian iron ore futures in the previous session.
Coke futures extended Monday’s 4.7 percent rally, rising as much as 3.1 percent to 2,140 yuan a tonne on Tuesday, its loftiest since Dec. 25. Coking coal rose 0.8 percent to 1,358.50 yuan per tonne, adding to Monday’s 4.2 percent surge.
Apart from transport bottlenecks in China, there were also concerns over disruptions of coking coal supply from major supplier Australia.
“Reports of heavy rain in Queensland have stoked fears of disruptions in the major coal basins in the state. For the moment, the disruption looks limited, with rail operator Aurizon saying its Queensland rail network remained open and operating,” ANZ analysts said in a note.
Source: ReutersPrevious Next
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