Iron ore futures climbed on Monday, with the Singapore benchmark rising back above $130 a ton, buoyed by improved profitability of steel mills in top steel producer China, although regulatory concerns weighed on the market.
The most-traded May iron ore on China’s Dalian Commodity Exchange ended morning trade 0.3 percent higher at 927.50 yuan ($134.91) a ton, holding firm after posting its fifth consecutive weekly gain on Friday.
On the Singapore Exchange, iron ore’s benchmark April contract was up 2.2 percent at $131.65 a ton, hitting its highest since Feb. 21.
The rapid rise in steel mills’ profits and output expansion of long-process steel mills have boosted iron ore demand, Sinosteel Futures analysts said in a note.
According to industry data and consultancy provider Mysteel’s latest survey of 247 Chinese steel mills, the overall blast furnace capacity utilization rate edged up for the ninth straight week, rising another 0.89 percentage point on week to 88.03 percent over March 3-9.
Chinese steelmakers have resumed operations after regular maintenance works or ramped up production amid improving margins and brightening outlook for the domestic economy.
China reported unexpectedly strong credit growth for February, with money supply expanding at the fastest pace in nearly seven years, as Beijing looks to support a nascent economic recovery amid rising global risks. – Reuters
