Iron ore climbs anew

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BEIJING- Iron ore futures prices rose for a third straight session on Wednesday, aided by expectations that construction activity is picking up in top consumer China, but gains were capped by investor caution over the scale of the demand recovery.

The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 1.5 percent higher at 814 yuan ($112.56) a metric ton, as of 0249 GMT, after climbing more than 5 percent on Tuesday.

The benchmark May iron ore on the Singapore Exchange was 0.14 percent higher at $107.65 a ton, following an increase of over 3 percent in the previous session.

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“Iron ore fundamentals have showed marginal improvement,” analysts at Shengda Futures said in a note, adding they expect the average daily hot metal output – an indicator to monitor ore demand – to exceed 2.3 million tons by the end of April.

“Overseas ore shipments may slow down in the near term after miners started maintenance following efforts to catch up with quarterly targets. But it’s still too early to say a turnaround has come,” they said.

Analysts at Soochow Futures also pointed out improved ore demand outlook after hot metal output has touched the bottom, but cautioned a further ore price rise may face some pressure as it’s hard to tell by how much hot metal output will grow.

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