SINGAPORE — Dalian iron ore futures prices touched on Monday their highest levels in more than a week, supported by improving short-term demand prospects for the steelmaking ingredient in top consumer China.
The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 0.5 percent higher at 706 yuan ($98.22) a metric ton.
Earlier in the session, prices rose to 709.5 yuan, their highest point since June 13.
The benchmark July iron ore on the Singapore Exchange was 0.15 percent higher at $93.65 a ton.
Hot metal production, a gauge of iron ore demand, inched up 0.24 percent week-on-week to 2.422 million tons, as of June 20, according to data from Chinese consultancy Mysteel.
“In the short term, hot metal production will remain stable, supporting prices for iron ore,” said broker Everbright Futures.
However, demand in China is entering the off-season, with construction material consumption already weakening, broker Galaxy Futures said.
While spring is typically the peak construction period ahead of the June rains, the rainy season has already set in, further dampening demand.
Capacity utilization rates for China’s electric-arc-furnace steelmakers fell 2.2 percent week-on-week to a three-month low of 54.5 percent, Mysteel said in a separate note, attributing the fall to persistent negative margins.
Total stockpiles of iron ore in ports across China rose 0.9 percent week-on-week to 134.6 million tons, as of June 20, according to Steelhome data.
Also capping gains was a firmer greenback, with the dollar index climbing 0.12 percent on Monday on safe-haven bids.
A stronger greenback makes dollar-denominated assets less affordable to holders of other currencies.
Other steelmaking ingredients on the DCE traded sideways, with coking coal up 0.44 percent and coke down 0.58 percent.
Steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar edged 0.13 percent lower, hot-rolled coil and wire rod both eased around 0.2 percent and stainless steel SHSScv1 lost 0.4 percent.
