BEIJING — Iron ore futures rebounded on Thursday as a mandated production cut ahead of a military parade in China proved less severe and shorter than expected, allaying demand concerns.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) closed morning trade 1.7 percent higher at 777.5 yuan ($108.39) a metric ton.
The benchmark September iron ore on the Singapore Exchange rose 1.44 percent to $102.2 a ton as of 0321GMT.
Both the benchmarks had fallen for six straight sessions till Wednesday, dragged down by demand concerns as steelmakers in China’s top steelmaking hub Tangshan were required to curb production for better air quality in Beijing for the military parade on September 3 commemorating the end of World War II.
The length of the production restriction in Tangshan is shorter-than-expected, therefore the overall impact will be limited, analysts said.
Hot metal output, a gauge of iron ore demand, will likely hold steady this week, lending support to ore prices, said one of the analysts on condition of anonymity as he is not authorised to speak to media.
Other steelmaking ingredients on the DCE also gained ground, with coking coal and coke up 0.77 percent and 0.57 percent, respectively.
Steel benchmarks on the Shanghai Futures Exchange were mixed. Rebar added 0.51 percent, hot-rolled coil was flat, wire rod rose 0.48 percent and stainless steel shed 0.16 percent.
