China’s iron ore prices hit the highest level in more than a week on Thursday as domestic steelmakers ramped up production, but demand prospects remain uncertain amid a heat wave and real estate crisis in the country.
January’s most-traded iron ore on the Dalian Commodity Exchange rose as much as 2.1% to 721.50 yuan ($105.38) a tonne, its highest level since Aug. of 0.2% at 705.50 yuan a tonne.
On the Singapore Stock Exchange, the most-traded October contract also hit its highest level since Aug. 17, but ended down 0.5% at $103.15 a tonne.
Spot iron ore for delivery to China was steady at $105.50 a tonne on Thursday, data from consultancy SteelHome showed.
“Domestic mills in China don’t have a lot of inventories. Recently, they have returned to profit. Production will increase much more as some large mills have not resumed production very quickly before,” a trader in China says.
On 19 August, China’s hot-rolled coil inventory fell to 2.9 million tonnes, the lowest level since 2 June, and rebar inventory was the lowest since 28 January at 5.4 million tonnes. tons, SteelHome data showed.
“August temperature is very high in China. September demand will be better,” the trader says.
China’s move to support its economy, including financing infrastructure projects, also lifted market sentiment.
However, China continues to experience extremely hot weather that has hampered construction activity, while restrictions to preserve electricity in the country have also hampered industries.
Source: CNN Brasil
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