China’s iron ore rises

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Chinese iron ore prices rose on Thursday, as domestic steel mills boosted purchases of the raw material and ramped up production amid lower inventories and rising profit margin.

The most traded January iron ore on the Dalian Commodity Exchange was up 1.7 percent to 719 yuan ($104.93) a ton at the midday break, and Shanghai Futures Exchange’s most-active rebar contract climbed 1 percent to 4,105 yuan a ton.

On the Singapore Exchange, the most-traded October contract rose 1.2 percent to $104.95 a ton, and spot iron ore for delivery to China edged up to $105.50 a ton, as of Wednesday, SteelHome consultancy data showed.

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“Domestic mills in China don’t have much stocks. Recently, their profit has come back. Production will rise much more as some big mills have not resumed production too quickly before,” said a China-based trader.

“August temperature is very high in China. September demand will be better,” the trader said.

China has been experiencing severely hot weather that has dampened construction activity, which consumes large quantities of steel, while power curbs to preserve electricity in the country also hurt industrial enterprises.

As of Aug. 19, hot-rolled coil inventory in China fell to 2.9 million tons, the lowest since June 2, and rebar inventory was at its lowest since Jan. 28 of 5.4 million tons, SteelHome data showed. – Reuters

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