Iron ore futures jumped to their highest in more than three weeks as a rebound in steel inventory in top producer China suggested that demand for the raw material remained brisk.
The most-traded September iron ore on China’s Dalian Commodity Exchange ended daytime trading 5.9 percent higher at 1,247 yuan ($195.19) a ton, after touching its highest since May 19 at 1,248 yuan, and was set for a second consecutive weekly rise.
Iron ore’s gains on the Singapore Exchange were muted, with the July contract rising 0.8 percent to $209.80 a ton, after earlier hitting $214, the highest since May 13.
“Iron ore futures extended gains as sentiment remained buoyed by signs of strong demand in China,” said ANZ senior commodity strategist Daniel Hynes.
Stocks at 184 Chinese steel mills covered by Mysteel consultancy’s weekly survey stood at 6.04 million tons as of Wednesday, up 2.7 percent from last week partly due to increased output, it said.
Concerns over tight global iron ore supply also supported prices, with seaborne cargoes and portside materials in China trading at the highest since May 19 above $200 a ton.
China’s iron ore port inventory hit a four-month low last week, while weekly shipment arrivals fell.
Adding to supply concerns, Brazil’s Vale SA halted production at two mines and decommissioned a dam over safety concerns.
