Iron ore futures rose on Tuesday, with Singapore prices rebounding after two straight sessions of losses, as top steel producer China resumed ramping up output to cash in on increased construction activity during the September-October peak season.
Benchmark October iron ore on the Singapore Exchange climbed 1.5 percent to a session high of $97 a ton, while the September contract rose 0.2 percent to $99.
On China’s Dalian Commodity Exchange, the most-active January iron ore contract rose as much as 1.5 percent to 721 yuan ($100.61) a ton.
Rebar output among the 137 Chinese steel producers covered in a weekly survey by industry information provider and consultant Mysteel rose 26,700 tons, or 0.9 percent, for Sept. 15-21 to about 3.1 million tons from the previous week.
Steel mills are also replenishing their iron ore stocks, ahead of China’s week-long National Day holiday from Oct. 1.
Tuesday’s market gains indicated that the market has not given up hopes that the recovery in Chinese steel production and demand would be sustained throughout September and October.
“Data from CISA showed average daily output of crude steel from major steel mills increased 2.23 percent in mid-September versus early September, as the industry geared up for peak construction,” Westpac analysts said in a note, referring to industry group China Iron & Steel Association. – Reuters
