BEIJING- Iron ore futures rose to a near three-week high on Tuesday, boosted by growing buying appetite from steelmakers in top consumer China ahead of the upcoming peak demand season.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 3.34 percent higher at 758 yuan ($106.37) a metric ton, the highest since Aug. 7.
The benchmark September iron ore on the Singapore Exchange was up 1.55 percent at $101.8 a ton, the highest since Aug. 9.
“The main trigger for this round of price rebound is the reinforced signal of an interest rate cut from (the US Federal Reserve’s) Powell,” said Pei Hao, a Shanghai-based analyst at international brokerage Freight Investor Services.
“Moreover, some steelmakers started to stockpile iron ore to meet production needs for September when steel demand will likely improve, providing some support to ore prices.”
A few mills have planned to resume production following a maintenance period, sparking expectation that ore demand will bottom out, according to analysts at Everbright Futures.
However, thin steel margins and lingering high portside stocks remained headwinds, limiting the upside, said analysts.
